We predicted the markets would run into resistance this week. We predicted we'd see volatility going into options expirations today. We predicted the media would spread fear on the possibility of a fiscal cliff deal not getting done soon enough. And more importantly, we predicted the world wouldn't end today. I wonder if there's a future in palm reading? No pun intended. In all seriousness, the indexes are acting perfectly according to our recent analysis. News hit the wires the House called off a vote on tax rates and left federal budget talks with only a week and a half left before sweeping tax increases and government spending cuts are supposed to take effect. The House bill would have raised taxes on Americans making at least $1 million per year and locked in decade-old tax cuts for Americans making less. Well, we've said it five times before and we'll say it again. They're making such a huge deal out of something they're going to have to get done, regardless of whether or not it's this week, next or sometime in January. So, if you're in the non-emotional opportunistic camp of understanding that stocks simply become cheaper when there's fear on the Street, then today's sharp open lower should be a welcomed event. Right now, in my humble opinion, it's all just a bunch of political jostling while politicians try and figure out a way to leverage negotiations in such a way they inevitably end up helping their large campaign budget constituents. Of course, they are looking out for our best interest, but they're also looking out for theirs as well. It's just how the system works. I know that seems cynical, but am I wrong? Consumers sure don't seem to care as the Commerce Department reported this morning consumer spending rose 0.6 percent last month when adjusted for inflation, while new factory orders for capital goods outside the defense and aerospace sectors, a proxy for business spending plans, jumped 2.7 percent. The data revealed the rise in consumer spending in November was the highest in in three years, and a gauge of planned business spending jumped, both signs that households and companies really don't care about this whole fiscal cliff issue. Why? Most people don't care much about the thought of something being taken away until it has actually been taken away. It's just human nature for the most part. What does this all mean for the markets? Nothing. On a short-term basis, the markets are extremely technically driven right now, and I suspect when it's all said and done, so will be the longer-term outlook. This is why we're having a lot of success anticipating what the markets are going to do. If you closed out your long positions and took some profits, good. If you opened up some puts options on your favorite ETF per our suggestion earlier in the week, even better. You should be nicely in the money. Just be careful not to get too greedy because although we did mention yesterday the markets were looking a bit "toppy", now that we've sold off handsomely this morning, we're again back to the 3X3 DMA (blue line) in the daily chart of the S&P 500 shown above here. It's important to remember our analysis over the last while regarding the S&P and the DOW both continuing to want to move back north every single time they've come back to that key 3X3 displaced moving average. However, with options expiring today and a reset of a new options period Monday, I suspect the volatility is going to continue to increase. As it stands right now, the short-term bears have control. If you look closely at this daily chart of the S&P, you can see the volatility has picked up dramatically throughout the week, and the NASDAQ reversed course right on its 5/8 retracement of its complete run from the November low. Additionally, if you paid close attention to the end of yesterday's edition, we made it pretty clear there was a big clue we were looking for in order to determine the next wave of momentum across the indexes. I've included another hourly bar chart of the S&P 500 here for your review. Yesterday, we mentioned every time the S&P has pulled back since its November low, it found its footing on either a 3/8 or 5/8 retracement of its previous leg up. Guess what? The S&P tried hard this morning to stay above the 5/8 retracement, but it finally cracked to the downside. Not in convincing fashion quite yet, but nevertheless it cracked, and we mentioned yesterday if the index couldn't hold its 5/8 retracement level on the hourly chart, it wouldn't be a good sign for the bulls. With all of this being said, let's tie it all together now and peg another potentially good tradable level where the markets may gravitate towards should they continue their recent slide. The NASDAQ paused and sold off hard on its 5/8 resistance level on the daily chart. The volatility of all of the indexes in recent days has increased dramatically. The S&P and DOW both cracked their short-term 5/8 support levels this morning. All signs pointing to further weakness in the days ahead. I've included a daily chart of the NASDAQ Composite, which has held more true when it comes to resistance levels than its counterparts. You can see I've drawn support levels now suggesting where the NASDAQ may want to find a base. The first level sits at 2965, however, if we trade down to that level, it would be a test of a confluence area, and I suspect if we get there, there's a strong possibility we'll take out the confluence area I've circled here, and potentially end up testing roughly 2900. I'd get long there for at least a good bounce. Congrats to those of you who took money off the table in RIMM yesterday, and even more kudos if you did it in the after-hours. Like we said Wednesday, it's ok to take money off the table when you're up over 40% on an idea in as little as a month. RIMM came out yesterday announcing a beat of expectations. The stock ran to as high as $15.45 in after-hours before reversing course on concerns surrounding their service business. We mentioned in Wednesday's edition the stock would run into resistance around $16 per share, and sure enough, it was meant with intense selling pressure in the after-hours yesterday as it tried its best to achieve the $16 level. Now, the stock has imploded, currently trading around $11 and change. However, all it has done is pull back to a very logical retracement level on its weekly chart. If you missed the opportunity to jump in before, now may pose the best buying opportunity since it started its climb a few short months ago. However, should you get long shares of RIMM around current levels, make sure to employ a stop loss you are comfortable with in the event it isn't done backing and filling. Again, a good reminder it's ok to take profits and it's ok to be patient on the buy side of any idea. Additionally, this is exactly why it's perfectly ok to date stocks rather than marry them, and why it's so important to be opportunistic in this market, which is exactly what we plan to do with our new SCN Elite Opportunity. We'll have more details on this new subscription opportunity next week and truly hope you join us in our efforts to expose the markets for an excellent 2013. For you NFL fans out there, our reliable picks came in too late to get them into last Friday's edition. Our apologies. However, if you must have some NFL fun this weekend, let's take Atlanta, Green Bay, Minnesota, Chicago and San Diego. Good luck and have a great weekend! Since the world didn't end today, I suppose we should all be grateful from this day forward for every single day we get to experience above ground. Happy trading and have an excellent weekend.