Market Reversal

Dear All,

Dow Jones Index

S&P500 Index

Nasdaq Composite Index

Yesterday we had a strong market reversal. The major indices had very strong showing with extremely good day ranges:

• DOW - more than 600 points
• S&P500 - more than 77 points
• Nasdaq Composite - more than 131 points

Whether the market sustains this strong reversal today depends on how Paulson plays his cards at 10am EST - when he will be giving a news conference addressing the measures that he is proposing. The RTC proposal or the likes of it seems to have boost market confidence. Similar proposals were seen in Asia when it had its economic crisis years back. It seems to work.

For the moment, I will abandon all shorting views and wait for a confirmation of trend. I may convert my Dec and Jan Puts to calendar spreads instead of taking immediate losses. The IV is high - so good to sell options. This is a repair strategy.

The market fundamentals are still bad. The market may still make another round of downtrend. The current market is not for the faint-hearted.

PersianCat (Millionaire-in-progress)