Market Update Email 3-6-09

To: Friends and Family
Subject: Current Chart

All, it's been awhile since I sent out an updated chart, so here it is. As I mentioned I took some profits today and am frankly unsure of whats going to happen next. I still am waiting for that bounce and we have a possible wave count completion (see chart), but my indicators say we could have a lot more downside before that bounce.

Im just not sure. I will do some more research this weekend. For some reason I am not trusting my indicators. What I am sure of is we will get a multiday bounce when this down leg is over followed by another big selloff which should complete our market bottom at new lows.

The 2nd chart is one of the VIX (the implied volatility on options contracts). This is one of my indicators and it should be peaking as the market falls. The chart I built has the VIX inverted so that it tracks the market (which means it should be spiking down as the market falls). As you can see there is some crazy divergence going on now that hasn't happened this entire bear market. Why is the VIX not tanking? That is what I need to study more.

Good luck. Nothing wrong with staying out of the market when you are unsure of things.

Market Update Email 3-5-09

To: Friends and Family
Subject: Quick Market Update - Taking some profits

Just wanted to let you all know that I am taking some profits on my shorts. I still think we will see lower lows, but I am also expecting that decent bounce I have been talking about, therefore I am going to a more cash stance for now until I am able to do some more research. Currently that bounce can run as high as $775 when it does occur, but I doubt it will have that much steam. Theres a few things I must figure our first including the VIX, put/call, and relative strength of the nasdaq 100.

Im still bearish, but being the aggressive trader that I am, taking some money off the table seems like the smart money management thing to do. So, wait and see mode it is for me. I am still holding some shorts, but have closed all of my put options on the market. The one regret I may have is if this market crashes, which the VIX and Put/Call are certainly supporting right now, but I would rather miss out on that than risk my profits of the last 2 months. Besides, I am banking on that next opportunity in a week or two.

Just trying to do some money mangement for now. Send me individual questions if you have any.
Good luck.

$VIX Blog entry on Stocktock

This blog links to a blog I posted on stocktock.com...

The VIX has yet to confirm this move even though we are down 20% from the nearest high...im still trying to figure it out. either this is a gift from the put buying gods or something is up. Maybe some comments will help figure it out.

Bear market until proven otherwise!