Hope you had a nice weekend. We're back at it kicking off a new week for the markets, and this week will likely prove to be the catalyst for the rest of the year. Before we pick up where we left off last week's index analysis, I want to point out our suggested oil trade back on the 15th of November continued to cooperate with the price of light sweet crude approaching $90 per barrel. We suggested getting long either USO, OIL, XLE or UCO in an effort to shave some decent short-term profits, and that's exactly what we've gotten to this point so far. Depending on which oil ETF you played, you're likely up a decent percentage, albeit modest, on what we determined to be a very low risk idea at the time. Nothing earth shattering, but still money in the bank, nevertheless. However, with oil now up against its 3/8 retracement from its September highs to the November lows, it may be time to take profits, or at the very least set a firm trailing stop locking in gains in the event oil starts to move lower again. A trailing stop would ensure you make money, while continuing to give you exposure should oil move to its 5/8 level of roughly $94 per barrel. Back to the broader markets. Once we got the all-important Friday the 16th wash and rinse last month across all of the major indexes, we've been pretty spot on with what the markets have done since. We reached our NASDAQ Composite short-term target of 2958 suggesting the indexes would likely pull back at that point, which they did. Once the indexes back and filled, they started moving higher and we issued a new target of just over 3000 on the Comp., of which the Comp. closed at 3010 on Friday. This morning, the Comp. gapped higher opening at 3030 and have since sold off as I type. This is where things should start to become pretty dicey. I've included a daily chart of the NASDAQ Comp. below showing you the same confluence area we mentioned last Thursday using a chart of the NASDAQ 100 (^NDX). I've circled the same basic confluence area here when we suggested the level the ^NDX might trade slightly above before running into its second significant test. As you can see, the Comp. gapped perfectly this morning right on that upper band of the confluence area I've circled here. What does this all mean? We mentioned last week the NASDAQ might want to trade slightly above that confluence area before running into major resistance. Since technical analysis is generally never absolute, we've gotten pretty darn close, literally within a few points. As it stands right now, whether the indexes move slightly above the confluence area referenced here, or starts trading lower off of this morning's open, there's not enough room to continue to stay long index call options at this point. As a matter of fact, it might be prudent to close out any index call options around current levels and lock in your profits, or even reverse the position and pick up some put options on any short-term strength to the upside either today or tomorrow. We may start seeing a fair amount of volatility before it's all said and done. On a short-term basis, I don't see the value in staying long or getting long index ETFs right now. The NASDAQ is at a key resistance level and will likely meet a fair amount of selling at some point this week. In the event the NASDAQ Comp. surprises and breaks strongly above 3046, that would potentially suggest another strong leg up, however, should the Composite stall slightly higher or right around where it is now, we could be in for at least a fairly sharp pullback. Just like the sharp reversal we got back on the 16th  which initiated the relief rally to the upside, we’ll be looking for the opposite event to take place in the days ahead. It’s important we let the indexes tell us if they want to move higher from current levels, or if this recent rally was nothing but relief in the face of a weakening market environment. We’ve still got a good number of trading days left for the month of December, so let’s exercise some patience and see what this market wants to do now that it has achieved some very logical retracement levels. With most of the third quarter earnings over at this point, it has become quite evident the S&P 500 index has outpaced that of its earnings growth for the year. This isn't necessarily a big cause for alarm, but it does put the markets in a position to have to deliver in the fourth quarter. With so many companies revising estimates lower for the upcoming fourth quarter earnings' season, it's going to be real interesting to see if the third quarter numbers for 2012 were an anomaly, or the beginning of a very bearish earnings trend.