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Ash Friday

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Hey Saddam--you wanna piece of me?

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There's a fear down here we can't forget.
Hasn't got a name just yet.
Always awake, always around,
Singing ashes, ashes, all fall down


(The Grateful Dead)

Man oh man oh man...boy is it coming down now! The flakes keep falling, the fluff is starting to accumulate and people are getting buried. And it's snowing too! To add to the excitement, Snoop Tone just walked in (with a head full of snow) and screamed "Wasabi!" Yo Frosty, how goes it? I've been in an investor meeting for the last hour and a half so, while you fondle that Daisy doll (sicko!), I'm gonna pen a post to my fellow Minyans.

While I was chowing protein and talking tape, my eyes kept migrating back to the NDX 960 level. As you know, this is a zone that's held a bunch of times this week and now, late on a Friday and the smell of terror in the air, we've broken it to the downside. Is this a telling sign of ominous things to come? Maybe...but with the market this coiled, I'm not in "press" mode.

With that said, I'm not in anvil catching mode either (yet). This Shim is/was necessary (in my humble opinion) if we're to set up for a counter-trend rally. However, talking about the Shim Sham and trading it effectively are two entirely different endeavors. If we're to prosper, time and price will dictate our performance--and while it's entirely possible to game one of those, nailing both is elusive at best.

With that said, S&P 810ish continues to pop up in my head (for some reason) and if we get down there sooner rather than later, I'm gonna put these cookies down (sorry) and begin to scale into the bull costume for a trade. Identifying a style is an important element of successful trading and while I've been in "stick and move" mode recently, I "think" I want to begin scaling into exposure (and appendages) between S&P 810 and the October lows.

That's not to say that I'm gonna subscribe to the blind ambition trade and buy stocks hand over fist. As a function of the unknowns in our midst, I don't want to leave myself with open-ended risk. I'll look to define my exposure via upside calls (if and when) and play it that way. S&P 828 is the two-month trendline support in the S&P (thanks Andy) and, if we bust through it to the downside, that could produce an actionable level (on the long side).

As I speak, I'm seeing 5000 lots of S&P puts being bought and, while that's BULLISH on the margin, I'd prefer to see it accompanied by a spike in the VIX (fear is good). I'm not sure if that's today's business but my antennas are up. So you know, I just sold 1/2 of those puts I bought this morning in the financials--the tape feels drekky but profits are good--even if their made of peas.

I want to get this out to you---I'll be back soon. I sincerely hope you're faring well.

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