SM Feb 23

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Net weekly money chart with market pontications.

Fellow Traders,

We finished one of the worst weeks for markets in some time. The more information we seem to get from the Administration the worst the market behaves. We "buy the rumor" on hope and "sell the rallies" on the lack of any fundamental support these programs might engender. We cannot wait for the bank bailout news.

We could be at 600 on the S&P when the bailout news hits. However, we would be worst off if the government did nothing. We are in the grip of powerful deleveraging forces. This has to run its course. Remember time and patience.

Meanwhile our White House Press Sec. Robert Gibbs has got to get some award for the dumbest comments I have heard in a long while. In a press conference briefing, Gibbs dissed CNBC bond-pit analyst Rick Santelli and accused Santelli of not "understanding" the latest piece of homeowner bailout legislative.

I've never personally met Santelli but I have listened to him on CNBC for over five years. Of all the financial market commentators on the air, he is one of the best and anybody who accuses him of disagreeing with them on the grounds of a lack of understanding of this issue. What the hell does Robert Gibbs know about the financial markets anyway? I doubt Gibbs could not make it one day in the pits if he had to make a living in our trading world.

For the most part, our stocks continue to drift lower. Selling calls against these stocks on rallies helps quite a bit for most of them while waiting for those great dividends. We are soon approaching the time when we can look to sell puts on our dividend plays. Then maybe look to buy calls on a variety of high beta-type stock ideas with the put premiums. Stay tuned for that coming your way.

Take a look at the attached Money Chart of the Week. Trading still works rather well but if you are not paying attention the news you may be left out in the cold. News breaks rather fast and furious out there so pay attention and remain alert. There is never a dull moment in the Chat Room lately. Walking my dog, getting coffee has become rather expensive with missed opportunities.

Finally, Huntsman reports earnings on Thursday. I can't wait. I’m looking to sell puts on NLY and LINE when they go lower. I pretty much sell a small number of puts nearly every day on HTS, HUN and ERF. Currently, I am looking to sell LEAP puts on CAT at $24-26.00 and FCX at $23-25.00. Selling calls on FCX in the $30-35.00 range near strikes have done well for me but I think FCX looks much higher so I'm moving the strikes higher and further out.

Good trading. It doesn't get any better than now.

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