Our System is not Even Capitalism

Elizabeth Warren writes "Go in any appliance store in America and look for a toaster with a one in five chance of exploding. You won't find one. But at any mortgage broker in the country in recent years it has been possible to purchase a loan with a one in five foreclosure rate, and the broker doesn't even have to tell you the odds. Why the difference? Toasters, like every product you touch or taste, are tested for safety.

In the financial services market actual costs and unfavorable terms are actually concealed. Can you imagine if Bush and McCain's ideas to privatize social security had actually taken place?

We are now, if you haven't figured it out, nationalized and socialized by a Republican administration that let it get so far out of hand they had no choice. Democrats are surely at fault here also. We are all.

We need more unfiltered truths, more questioning of authority, and more arguing. Show some basic "disrespect" as you hear the pontificating.

James K. Galbraith tells us "our system is not even capitalism. Our economy has a large public sector, which at its best was competently concerned with research, defense, financial stability, environmental safety, social security, and large measures of education, health care, and housing. Today after eight years of of attack on real government, and wild spending, all these functions are damaged and in peril".

This is part of what the market is "deep breathing" over, and figuring out. It is all coming to the surface, and it's bile.

Yesterday finally the market began breathing again, however, and our OTM put trades were very profitable:

Floyd:

Yesterday purchased:

20 - Nov 300 Puts @ 1.05
5 - Nov 380 Puts @ 5.40
3 - Nov 400 Puts @ 8.00

Sold all at the open.

Nice!!!

Didn't like how the Nov 300's were trading.

Will sit on hands and wait for volitility to calm and premiums to erode a little....

Big range on the VIX today, looks like downside is very likely.

_____

Hooray, I actually managed to profit 49% on my puts!
I thought they were "nuked" for sure.
Now the trick will be to sell the calls so that either I don't lose on
the combined strangle, or maybe even manage to get a profit.
BTW - last time I wrote you of my 40% profit in which I was so glad about,
turned out it was premature - the other side of that trade eventually lost 81%,
so the combined strangle lost quite a bit back then (in percentage terms,
I didn't invest too much money). So I don't want to repeat that mistake and
celebrate too soon.

The above scenarios say it all. Trader 1 played the puts, profitably, and trade 2 is caught in our straddle, with the puts only profitable. Because of the volatility of VIX calls have lost even more value.
It is hard to read where a market bottom might occur, but a rebound is likely. We'll use our OTM call and continue to hold through Friday, and issue a HIGH risk alert to an ITM call, on the "guess" that a market bottom
may soon trigger some slight upsell.

And from Germany, Advanced Mentoring client PC was pleased with my decision to NOT offer a new trade yesterday:

I have read that "God" appeared to Solomon in a dream and told Solomon to ask for anything he wanted. Solomon chose wisdom, with that he could do the rest himself.

I think of all the gifts a man can bestow on another, the finest is to teach him how to think; subject-specific that is. Sir, you are teaching me this, in my chosen subject, to ask the questions, what, why, how? and to look beyond the obvious where all the lambs sit. From this it is possible to take the "do nothing option" at appropriate times because it the correct, informed and thus decisive "action" to take rather than simply unable to do anything through fear of not knowing what to do as a rabbit in the headlights.

Your advice in today's alert confirmed the reasoning I was applying, which was/is..... Big Money will not buy OTM Calls, to even push up the price for their own benefit, for fear of getting stuck with them whilst they anticipate another nose-dive in the market, nor will they bid up Puts they sell for fear that they will sell faster than hot cakes and have to pay out on them from the same nose-dive. Money must move and trading must go on so ITM is "safer" so all the fish are gathering into a smaller pond as it requires less speculation, the "cost" for that is that all money which is available to be made must come from the ITM range and this ramps up the bid and ask prices. 2 days of half-volume in the market generally so big business is doing what it always does in every market, attempt to make the same "income" from less sales, potato prices go up in a time of shortage. The demand does not rise, the demand for potatoes is stable without an increase in population so the rise in price is simply because the seller can charge more to those who really wat them. On the other hand, I "noticed" the volume on individual options, particularly OTM Puts, "someone" is quietly accumulating them. I didn't think to make that a study when I noticed it yesterday when the market was open (pennies often drop a little later) but will study today and include Calls in it. There are times to watch and wait :-)

Your guiding hand and wisdom are steadily changing my life, empowering me to conquor fear, let us call it by its name, and to intelligently apply the knowledge you place before your students, truly the act of a mentor.

To say "simply heart-felt Thanks" is simply to say too little!! You add something to me every day."