4-02 Close

Today went about as well as I could have possibly hoped for.

Stayed about even, I should have made some moves but I didn't. Dummy.

Here's the thing, the chart tells me we're going to get a repeat of August/September.

Test this theory on a hourly basis. If it holds, we should get a series of small declines. Big decline, and maybe hold a little more - if it starts to go up, then cash out immediately.

What else happened today?

VIX bounced off the support line - THANK GOD. But continue watching this.

We have 13 trading days left for my options.

For Mer to get to 30, it will have to drop a dollar (2-3% a day, or over 12 % a week!) Can this happen? It sure would be unprecedented.

If the pattern follows, then MER will drop too slow for my 30s to be worth anything. If tomorrow doesn't bring a big drop, cash out. Even if the drop is substantial, start cashing out.

One really bad thing: the Volume today was pitiful. Absolutely pitiful. But Mer is still under the trend line and looks more likely to repeat the action from november rather than august/september.

The short side argument is that november is a better fit because the events in august/sept where when nobody knew we had problems.

The long side argument says look at the volume - and people are convinced the worst is over, evidenced by the rally from yesterday and the anemic perfomance today despite bernanke.

Remember to keep an open mind. Follow the action carefully and make the decisions based on the events of the day (but also take technicals into account)

Scratch the november thing with mer. this shit looks just like december. that would be BAD, or good. More and more, december looks more and more likely. this means you gotta get out NOW.

EXCEPT - December was MUCH more oversold than it is now.

If MER is actually in the phase where it goes up, this might explain the volume of the Julys. Cuz thtat's when things will start to blow up.

I HAVE to start getting out of the 30s.