Market Outlook

Hopefully we have a more exciting day today, than we had yesterday but I doubt it. We have the ADP report coming up but the big data comes tomorrow with the stress test results and then Friday with the unemployment report. I don't know what financials will do but I believe there will be some volatility. I own the VIX and am considering playing an outward straddle on the FAZ. I still own SKF but might write calls on my position, to protect myself. Writing covered calls on any of your position is a good strategy now in my opinion. The upside may be capped but you will get a "extra dividend".

I will be honest, the BAC is very alarming. If they $35 billion, that will create massive dilution to the common equity shares. Also, the GM 1 to 100 stock split is hilarious. The stock would be $185, with barely any outstanding, and in my view, it won't work because short sellers will pounce in and short it down to $75.

As for my trading account, I have:

ACH (Chinense Aluminum)
ATHR (Integrated circuits semiconductor)
CNO (speculative breakout candidate)
DELL (cheap PCs)
EXM (shippers-reports after the bell I believe)
SKF (ultrashort finanicals)
FXP (ultrashort china index)
GIGM (chinese gambling player)
GNK (shippers)
NXG (gold play/speculative breakout candidate)
SD (cheapo energy)
SDS (ultrashort S&P-primary hedge but my patience is thin)
SONS (speculative play - communication networks)
VXX (short term VIX futures etf)
FCS (semiconductor)
JJC (copper etf)
EWZ (brazil etf)

Keep in mind, if we reverse and head lower, the small cap/spec breakouts tend to get nailed first, so although small caps are fun with big swings, they bit hard on any pullbacks.