Steve Jobs Takes a Leave and Market Follows

Top Line: The stock market is getting closer to a low and tonight's Steve Jobs announcement encourages some emotional selling...a perfect recipe for going the other way.

No, that was Not an immediate rally. So, what now? The market is in the process of putting in a bottom and the headlines are scaring people again. Tonight's headline about Jobs took AAPL (Apple) down about 15% right after the news. Not only that, the futures dropped about a percent along with it.

We want to keep the focus in the right place. Our forecast has been that the market would rally into the inauguration which of course has not happened. Well, we still think the 10K Dow is coming pretty soon but will not quite make it by next Tuesday. When does the Dow bottom?

Today's market seemed extremely bearish and topped off with the Jobs' news after hours. The technicians want you to think the sellers were out in force and for one particular stock, C, they were. C sat at the top of the volume pack with over 500 million shares trading. That was more than a third of all shares traded on the NYSE. And, yes, C was down on the day, over 20%.

The technicians tell us that Wednesday was a 90% down day which means that down volume was more than 90% of the volume was on the downside. We like the idea that the huge down day gets us closer to a low. The biggest indicator is the fear factor which leads us back to the volatility index.

The VXO traded around 50 all day. We haven't talked about the VXO much lately so let's review. The VXO measures the premium in options and when people get scared they buy puts and will pay a huge premium for them. These levels have now pushed the VXO over 50 again. Normally, the VXO trades around 20 and Rarely trades up to 50. So, here we sit with the VXO at 50 and people wonder what to do...

So, with prices down again and the volatility numbers high, the time to buy is now. GDX is trading around 28 and there are many other cheap stocks out there. How are your favorite stocks trading? Are they urging you to sell? Please resist that urge. The first rally we get off these lows will be strong. We don't want to miss that.