Good Monday to you. Markets are off to pretty much the same start we saw most of last week after the big Wednesday boom to start the year. Not a whole lot of change yet while the indexes wrestle with the possibility of either pulling back as we head into fourth quarter announcements, or continue their moves higher after grinding sideways over the last couple of trading days. Truth is, either scenario is very possible in the very near-term. The NASDAQ opened the weakest of the bunch this morning testing last Wednesday's low on the day. I've included a an hourly bar chart of the NASDAQ Composite showing you what I'm referring to. No harm no foul really since last week's move was so impressive. However, should the Comp. crack the morning's low back to the downside, I suspect the indexes will continue at least a bit lower in an effort to retrace 3/8 of last's week's impressive move. A complete 3/8 retracement of last week's move would put the NASDAQ Composite around 3055 as you can see here. Although last week's move was impressive indeed, this week will be the telltale sign if the bulls have enough conviction and buying power to take this market higher. Why? Plenty of money came into the markets the first day back, however, the volume and interest waned as the week went on. That's pretty typical to kick off a new year and a new quarter. What we need now in order to be convinced the indexes are moving higher is a resurgence of last week's early volume. Short-term trading cycles typically tend to run in three day waves, so this week is critical if we're going to move higher without any significant backing and filling. As a matter of fact, that 3/8 retracement level I mentioned above will likely become a key battle point between buyers and sellers. The longer we can grind sideways without sellers entering the markets, the more it supports the bullish argument. You can also see in the chart of the Comp. the hourly chart is doing its best to hold the 25X5 (purple line), which often serves as a fairly strong backstop after a big run-up like we had last week. Another important factor to consider when trying to determine if these markets want to work their way higher in the short-term is the VIX. The VIX is the key measure of volatility in the markets, and more importantly, one of the best measures in determining whether or not there's enough fear out there to rally savvy money to the upside. I've included a weekly chart of the VIX here showing you last week's strong bump brought the VIX all the way down around recent historical lows. Unless the VIX can take out the lows in this chart, which is actually pretty doubtful, it appears the markets would be in for at least a fairly decent pullback that would put the VIX back around normal levels. What you can't see in this chart of the VIX is the last time VIX levels were lower than where they are now dates back to 2005 and 2006 when the markets continued to grind higher. In my opinion, the best time to be buying stocks is when VIX levels are screaming higher. History has taught many of us to be careful when VIX levels are at all-time lows. It suggests a bit of complacency in the markets, and that's generally never a good thing. A good hard scare is often the best time to be stepping in and snapping up the right ideas. Should the VIX continue lower from current levels, I suspect the possibility of a storm brewing that could likely serve as the best buying opportunity for the year. Short-term traders need not worry about the longer-term picture simply because you just need to be on the right side of the trade. In other words, picking up some index puts on the QQQ's a month or two out, or buying the ProShares UltraShort QQQ (QID) may be an excellent way to expose yourself to some short-term profits in the event the indexes want to back off for a while before heading higher. The QID's seek daily investment results, before fees and expenses, that correspond to two times the inverse (-2x) of the daily performance of the NASDAQ 100 Index (^NDX). In other words, if you think the market is going down in the short-term, the QID's can yield some excellent results for those who don't play options. However, do keep in mind, ultra-short and ultra-long ETF's also erode with time, so it's important not to stay in ideas like that for too long. Get in, take your profits and get out. It's a swing trading vehicle of sorts rather than a longer-term shorting vehicle. The best way to play short vehicles such as the QID's is when you think the markets are on the verge of at least a nice healthy pullback, is to pick them up on short-term or intraday strength in a downward trending market. Although we clearly don't yet have a downward trending market on a short-term basis, the likelihood of one developing is definitely there if you're a VIX believer. Amazon (AMZN) Breaks Out While our recently suggested entries into CSCO and JNPR are doing just fine, it's our recently suggested entry into AMZN that's fueling a nice technical fire right now. This morning, shares of AMZN marched to a new all-time high, as the world's largest online retailer bucked the rest of the markets' weakness after Morgan Stanley upgraded the shares, citing an expected surge in global e-commerce sales. It's always good to see us out in front of major Wall Street upgrades. It's more living proof we have a better pulse on the markets than most. From a technical perspective, we continue to love this stock, and now that it has broken into new all-time high territory, sky's the limit at this point. Will Amazon become the new darling stock now that Apple continues to have trouble finding its technical footing? It's very possible. I've included a monthly chart of AMZN here for your review. Now that AMZN has broken out, it's likely going to be subject to a fair amount of short selling attempts by traders, which before it's all said and done will likely leave many short selling casualties laying on the ground. A nice healthy short rotation would be the perfect recipe, and just the type of activity we'd like to see, in order to potentially take the stock over $300 per share. We've included some fib expansion levels here, which point to $308 as being the first logical target for profit taking. As it stands right now, we're up almost 8% on the idea. If shares of AMZN can achieve that first logical profit taking level, that would put us at about a 25% return. If you didn't manage to get in on our initial suggestion, we continue to emphasize picking it up on weakness. Even if all anyone did was pick up shares of AMZN on our initially suggested entry, and the stock finds its way to that $308 target at some point this year, you will have still likely managed to beat the averages handsomely for 2013. That's the goal of our new SmallCap Network Elite Opportunity (SCN EO); crush the averages and hunt for monster winners in the process, all year long. A monthly subscription to our new SCN EO should be well worth every penny. Regardless if you're an active short-term trader, or a patient long-term investor, our primary objective is to provide you with ideas that have the potential to yield enormous returns, and continue to educate you in an effort to help put you in a position to have your best investing year ever in 2013. It only takes a few minutes to learn more and sign-up. Our first edition will be published this Wednesday January 9th, so if you want to make sure you don't miss a beat, you've only got today and tomorrow before we completely shift our focus and attention over to the new SCN EO. If you're serious about making money, SCN EO is a must. Click Here to Learn More and Sign-Up Or, copy and paste the following link in your browser: http://www.smallcapnetwork.com/pages/SCNEO/v1/. The three subscription package offers are located at the bottom of the page. Simply select the one you're most comfortable with and continue. It's all secure and your information will be kept strictly confidential. Have a great start to the new week, we'll see you tomorrow.