As the market will be closed for a Labor Day today, here is what to expect on Tuesday.

Right now we are at a pretty critical point. Every 10 pts. rise or drop might determine the market direction for the coming weeks.

From the chart above, you can see a potential Head & Shoulder forming and 1020 is a critical point here. If that resistance holds, we have a good chances hitting 960. If not, I would be looking for 1050.

I personally tend to believe that we are going lower, the only thing that worries me is a MACD, which is indicates more upside to come. So, here is how I’m gonna play it:

• Enter 1/2 of my initial short position in SPY at 102.00-102.50. Place stop at 103.40
• If we go lower – hold into my position and add the remaining 1/2 below 100.50.
• If we go higher eventually, will close my short. I’ll try to re-short near 105.00 (need to see the divergence confirmation from MACD first though).