You should lighten your long position or grab the next rally as a shorting opportunity right before the election at Nov, 2 and Fed meeting at Nov, 3

The S&P 500 Index was up 0.02 point, closed at 1185.64. Stocks kicked off the session on a sour note today, as the Street digested disappointing earnings reports from some of market heavyweights. However the positive consumer confidence report gave market a good excuse to bounce back to the positive zone.

With the Nov. 2 elections approaching and the Federal Reserve's next policy meeting on schedule early next month, the possibility of a correction is imminent.

The Fed has said it could take more policy actions to stimulate growth in the form of an additional purchase of Treasury securities. That's what will be the result of next Fed meeting at Nov, 3. But the market has already anticipated that, and the move has already been priced into the market.

Traders have to be very alert and cautious. If you are a prudent investors, you should lighten your long position. Aggressive traders should grab the next rally as a shorting opportunity, especially the rally right before the election at  Nov, 2 and Fed meeting at Nov, 3.