Waiting for the bears to over reach

Jitters regarding Moody's sovereign debt downgrade of Greece and warnings regarding the US and UK's AAA ratings have the market down. Yet another worry to tack on to the W.O.W

We've been stuck in a tight trading range for 3 weeks now and the main indicators I track have been stuck in neutral as well during this time and the words "edgeless" and "meat grinder" are what I've been using to describe this chop. I've also said that bears need to get their game going before the middle of month otherwise we could see an end of the year melt up. Well, they are trying to do that right now as I type this.

What bulls need to see is for the bears to over-reach again going for the kill by piling into shorts/puts/bear etfs. In July the Head and Shoulders top was a perfectly laid trap which achieved this. If the market breaks down out of this trading range, that might do the trick again.

The bottom line is that I continue to remain patient waiting for a good set up for an IT trade. In the meantime, I've been using this time to scan for individual small cap stocks and I've found some interesting plays...