True to form, stocks were knocked back from the SPX 1100 level yesterday. In my Big Idea post Monday, I wrote that we should expect a rally this week as the August option expiration has tended to be bullish. Any rally toward 1100 is likely to get sold by bearish traders looking for a better entry level. Yesterday, they got that.

This does not mean that the market goes straight down from here. It is likely that the tape backs and fills a bit before making the bigger move lower. The sharply lower phase may get pushed out until after Friday's option expiration.

That being said, I am looking to get more short the market this week. Today, I will open a new bearish position on Goldman Sachs (GS) - Get Report by selling the at-the-money call and purchasing an out-of the money call.

Essentially, I see financial issues leading the tape lower into the November elections. GS could get back to $120.00 in that time frame.

Trades: Sell to open GS October 150 calls at $6.85 or better and buy to open GS October 160 calls for $3.00 or less.

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At the time of publication, Terry Bedford held no positions in the stocks or issues mentioned.