S&P Falls 7; Dow Down 39

It's interesting to see how the S&P 1480 area, or Dow 13,400 has been a major battle zone that has kept the market from advancing back to 1500, or Dow 13,500. The market ran in place again today with a downward bias ahead of the Fed and the start of brokerage earnings season when Lehman releases its numbers Tuesday morning.

A commenter, a few days back, said the he thought I was ignoring a bullish upside down head and shoulders pattern that would eventually enable the market to rocket higher. I just couldn't see it. And now with the passing for more days, it's apparent to me that the right shoulder was a mirage and that we may be dealing with, imho, a bearish pennant formation. Only time will tell and with the compression seen in the chart pattern, that time may be very soon.

The chart above that I threw together with some annotations clearly has the look of trouble, at least to me. Wildcards remain what the Fed does and what the brokers announce this week.

Where Lehman (LEH) is concerned, it appeared that strangle and straddle plays were being made in the September and October puts and calls, while more aggressive directional put speculation, including heavier volumes, were being placed in the January puts, including the Jan50s.