Now the best plan is conditioned on the behavior of the SPX in the next few days. If a solid oversold rally develops then we suggest long call spread positions with defined risk in the previous strong sectors. Here are a few ideas.

The markets appear bewildered switching back and forth from "risk on" to "risk off" as if there is nothing in between. Now equities are in the risk off position as they accelerated to the downside creating a dramatic change in the technical condition.

The apathetic response to numerous fundamental developments last week could partly be attributed to seasonality, but a more likely explanation is the lack of clear vision for the global economy. Slower economic growth in the US and the many announced cuts in government spending in Europe are rekindling the inflation vs. deflation debate once again and creating hesitation.

Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.

Expecting an upside bias we set up our RT Spread Scanner and found some possible suggestions in the oil and gas sector that we are now calling event related due to the supply uncertainty from the problems in the Gulf of Mexico.

The S&P 500 Index broke out above the upper trendline defining the falling wedge technical pattern. Since the volume on the breakout appears to have been not as high as required for a valid breakout we are suspicious that it can meet its measuring objective above the April high.

Last week's bear sightings may prove to have been just fleeting glances since the S&P 500 Index now has two active technical analysis patterns working, both favor upside breakouts.

Last Tuesdays' news that the Swiss National Bank's foreign currency reserves increased 80% in May resulting from the sale of Swiss francs and investing in Eurobonds, at a rate that appears to have exceed that of the European Central Bank, helped turn the tide of the very oversold euro. The result, a somewhat stronger euro also boosted equities and the economically sensitive commodities.

Direct from the Options Data Analysis and the Rankers & Scanners sections of IVolatility.com present the Best Calendar Spread based upon a differential between the implied volatility of the near term call compared to the implied volatility of the deferred month call.

To find a week with a comparable litany of bad news we need to go all the way back to the week ending September 22, 2008, a week that included the Lehman Brothers Chapter 11 petition of Bankruptcy and then after reducing their credit lines, Bank of America announced it would buy Merrill Lynch.

The updated weekly chart of the S&P 500 Index shows both a developing falling wedge outlined in green and the location of a potential right shoulder (RS) of a possible developing Head & Shoulders Top.

Although European sovereign debt still occupies a large portion of the financial news space there is little doubt that the crude oil bellowing up from the bottom of the Gulf of Mexico is about to take top billing on the list of economic concerns. Like the inverse of decaying option time premium, every day the rupture spews more crude oil, the risk of permanent supply disruption due to political exasperation increases exponentially.