Dirty Channel

UPDATE 10:53am EST: I am bored, which is when I start drawing channels all over the place.

I know – there are way too few touch points to validate this channel but I think it lines up nicely with where the potential inflection points are. Based on that MMs might walk this market lower and then we either drop like a rock or we break to the upside.

Thus far I would not want to wager which way it’ll go – this is way too reminiscent of what happened during the end of October. We kept chopping and everyone expected a major drop and suddenly we busted to the upside into {2} of 5 of (3). I’m not saying that’s what’ll happen this time around but just be careful – I don’t trust this tape further than I can throw the average market maker (and they are pretty heavy set from what I’ve seen). Keep your exposure thin and don’t get too greedy. I saw comments yesterday along the lines of ‘going all in for this one’. Sure – you do that – if it goes your way you look like a hero – but if it doesn’t you get wiped out.

There are old trader and there are bold traders. But there are no old bold traders.

Gamblers have a tendency to shift into ‘all or nothing’ during times like this. Traders weigh the odds and walk away if they are not in their favor. The question you need to ask yourself is this: What do you know that makes you think we crash and burn here? As you know I’m one of the most bearish traders out there. So, remember this is not coming from a slobbering mouth breathing permabull. If you hold June puts – never mind all that and just hold those suckers. But if you are sitting on March or even February puts – you might want to be looking for exits. Otherwise, if it goes in your favor – good for you. But if it blows up on you please don’t come crying here – I have been warning you rats for three days now.

UPDATE 2:50pm EST: FYI – I set up an Evil Speculator RSS feed with feedburner. You can either use that one or the WordPress generated on the top right corner of the page.

UPDATE 3:08pm EST: Rick Santelli strikes again – you GOT to watch this. BTW, this is one of the rare moments you will see a CNBC link on this blog – mark your calendars.