Last year called, they want their scapegoat back!

Does this sound familiar, the market was getting crushed, investors were losing money, banks were failing and puppies were dying. This couldn't go on any longer, someone had to be blamed for this. So what did the Gov't and the SEC do; they banned shorting on Financial stocks and other stocks that just wanted to be on the "cool list". At least the gov't now had someone to blame. It was those dirty short sellers doing this. It wasn't the economy, the economy was just fine. All was well for a couple of days. Remember that, seems like so long ago.

Here we are again, the market is heading to 600, even more banks are failing, C is going to 50cent and kittens are exploding left and right. Since nothing the gov't has done so far has worked, they decide let's blame the shorts again but this time we will say its the "up-tick rule" and we will throw in the "mark to market" account laws. And there you have the market roars 6%.

Here is how I think the next couple of days will play out, I think we work to fill the gap around 740 but there the market will meet up with some heavy resistance and the 20MA. It will allow the market to work off its over sold condition as well, giving some momentum to the bears. At the same time, on the 12th the gov't will say "Letting banks mark these toxic assets to what they see as a "fair value", is about a good idea as letting a 3rd grade Boy Scout troop go to a NAMBLA meeting, and the up-tick rule will not be brought back". This will be the sell the news trade and the market will start its way back to 600.

I am also watching the VIX closely, it went below its trendline but was able to close above it. A break of this trendline is potentially bullish for stocks, but there is still support at its 200 MA


I hope no one faded me on ACC today, it was great the stock was up 13%, I was able to catch 7% of that move. I also went long ERTS and shorted SSO towards the end of the day.
I have to also give a shout out to guys over at Slopeofhope.com for the SKF Put trades. These finally worked out and were just GREAT!!!!!!