FEAR and GREED

Historically in the past five years there have only been THREE times that there have been five downward signals in a row. Of those three previous times, the fifth signal hit the exact bottom twice; and the other time it missed the bottom by only one day and 79 Dow points. Also of note is that there has never been a case of six down signals in a row in the last five years. This all indicates that the bottom should be either behind us now, or very close to it.

Calls opened strong yesterday and moved to a high of 10.40. And then...came Bernanke. We believe that Bernanke is now starting to distance himself from Emperor Bush and the boys, and as the election comes, is admitting a few things:

1. There is inflation.

2. The USD is in the toliet.

3. We are in a recession and perhaps the interest rate bail out and tax refunds are not helping.

This helped the market shift gears, and during the day we saw shifts from a 12,536 top (note our 12,540 projections) to a re-test of the bottom, with a move to 12,298. With this the market began rebound.

The June660P was available for a $1.00 per contract, a perfect straddle move to a market very very confused and tired.

I continue to see upside. We are bottom testing repeatedly, and there will be a trigger that will start the action.

We had many emails yesterday from subscribers that are best summarized by this one from LS, Indianapolis:

"Floyd, I didn't listen. You warned us that we had too many signals "right" and that you were fallible. I made great money on all your trades for the last three weeks, and have pocketed 39k. I bought the call and now hold a large position, and as you said to me" too large", and I have become FEAR driven.

Then today I saw the market go up and go right to your first Dow projection at 12,540 and I had bought the put during that time and profited a quick 2k on that. I've learned that the market is driven by FEAR and GREED, just as it is with me, just like you said. I bought too much on the call, and GREEDY, became worried when I didn't have a profit in a day.

Thanks for writing me all day today"