Hope you had a great weekend because it's back to market reality today. Markets are off to pretty much a neutral start so far this morning when you consider last week's carnage. The NDX finally threw in the towel on Friday and broke below a key support level, which suggests this market may be headed lower. At this point, there's no reason to try and catch a falling knife even if you're looking for short-term profits on some index options. The risk/reward is too high to get long this market for the short-term. If you want to go out 4-6 months, that's a possibility but not this month's options... that's for sure. Advertisement Why are "801k Plans" Restricted from Being Advertised? These "801(k) Plans" - which have no age, income, or employment requirements - grow your money up to four or five times faster than traditional 401(k)s or IRAs. But it's unlikely you've ever heard about these special programs before: The U.S. government has placed restrictions on advertising them to the general Click here to learn why. Advertisement We mentioned in Friday's edition that the longer the NDX sat around that 2573 level, the higher the likelihood that it would break through that important support level and sure enough, it did. The $20,000 question now remains, where does market go before we find some semblance of a bottom? We're going to need to see a pretty furious snapback rally before we'll be convinced that this market has had enough to the downside. Right now, the NDX is sitting on its 200 day moving average on the daily chart while both the S&P and the DOW have retraced almost a perfect 3/8 of their moves that started way back in October of last year. One would think we're due now for at least a fairly decent relief rally but there's going to have to be a lot of mending done before we can assume the worst is over for the next few months. I've included a weekly chart here of the NDX for your review. I've circled a key consolidation period on the NDX dating back to February of last year all the way through December before this market took off to the upside. The top throughout that whole time period sat around the 2400 level on the NDX. That's likely going to be a pretty tough nut to crack to the downside without a fair amount of pressure. We're about 50 points from there now on the NDX, so that level could be a decent time to get long the market for the short-term at least. Any attempt to try and doing anything short-term to the long side right now may prove disastrous until we get some sort of signal that this market is done selling off. It could be right around 2400 on the NDX but won't know for sure until we see the price action. We'll likely take a shot there though and get long some index call options a month or two out in anticipation of a relief rally. I've also included a monthly chart here of the NDX which actually paints a much different picture for things on a long-term basis. Up until the end of May, the NDX hadn't even broken the 3X3 DMA to the downside. Even with June breaking below the 3X3 on the monthly so far, it would take at least three months below the 3X3 on the monthly chart before suggesting to me that we're back in a bear market. It's important to acknowledge this because although the daily and weekly picture seems so gloomy right now, the monthly longer-term picture still points to a bullish bias. If you're in the markets for the long haul and believe in the future of our economy, it's a great time to start building for the future. I can't tell you how many people I know who did not participate in the market's most recent rally even though we told them the market was going to continue higher ever since the beginning of the year. Now, this pullback presents an opportunity for long-term investors to position themselves for better things to come down the road. It's important to realize it may take months but the reward could be handsome if this market can find a long-term base and start working its way back higher. It may be painful to step in and start buying for the long haul if this market continues lower right now, that's understandable, but the reality is fortunes from investing are usually not made overnight, they're made over a very extended period of time. The bottom line here is we're going to use 2400 as a short-term floor on the NDX for a potentially profitable trade to the upside and suggest adding new ideas and averaging down for the long haul in companies you believe have solid fundamentals. Since we're only about 50 points away from that 2400 level on the NDX as I type, if you wanted to pick up some index call options on the QQQ's about 4-6 months out, I'd bet there's some money to be made there when it's all said and done. No new updates or any significant news with any of our open ideas right now, which seems to be pretty much par for the course with the market as a whole. One thing we can count on in the market is for things to change and we welcome that change much sooner than later.