• As the 2008 lows are tested near the opening, remember that a layer of demand is absorbed with each subsequent probe.

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• Also understand that the entire world is watching that level, so if you're using it for risk definition, you might want to draw the line with a crayon rather than a pencil.
  
  
• Lest you didn't hear, banks borrowed record amounts from the Fed's emergency lending facility last week.
  
  
• Foreclosures were up 71% year-over-year. While that's bad news for many—and nobody wants to profit on other people's pain—it provides an opportunity for some to pick up property on the cheap.
  
  
• While I pared risk into Friday's close, I'm happy to take tight, disciplined shots during the trading day. That included SSO and QLD on Friday (both of which were bought on the open and trailed higher before being booked) and some DXO (which is a bit thin for me but I've got a small position).
  
  
• With regard to gold, I'm happy to nibble near $700 for a trade but I will use $680 (Friday's low) as defined risk.
  
  
• Why? Check out the long-term chart of gold. I understand it's a fiat currency world but deflation, if it is to continue, knows no allies on an absolute price basis.
  
  
• The S&P is 25% below the 50-day moving average. Since 1928, that occurred five times and the index was higher fifty days later each time, according to Bespoke Investment Group.
  
  
• I read over the weekend that "over-writes" (selling calls against stock) is a very smart strategy. What they failed to mention is that the risk profile is precisely the same as selling a naked synthetic put option.
  
  
• While the Raiders leave a lot to be desired, the down time in Baltimore—including getting beat by my 8-year old nephew in Texas Hold 'Em—was just what the doctor ordered. Seeing those rascals is good for the soul.

R.P.


Did you know the doors to Festivus 2008 are officially open? Have you yet locked your spot for the critter trot as last year's soiree sold out? (This is our annual event to commingle our professors, partners and Minyans while chowing down and listening to live music. The very best part? It's for the kids in the good name of my grandfather.)