WE have NO ALTERNATIVE

Friday allowed put traders to profit in the a.m., for another profitable signal, and the afternoon, after the deepest unemployment number registered since 1974, saw every short seller in the market on high volume selling off, and raising the market beyond comprehension. This has occurred regularly on Friday's recently, with an opening downturn, and shorts covering their positions by day end.

Subscriber MP has been in dialogue with me on "communism and socialism" taking over our government, and the horrible situation we have allowed to be created now being solved by "government."

Sadly, he's both right and wrong. What is occurring is NOT communism in any way, nor is it really socialism. It's just plain and easy stupid Americans rushing to try to solve the worst financial predicament of our lifetimes without a clue of what to do.

The answer is not "let free enterprise figure it out, and let companies go broke, not bailing out." Sadly. Of course this makes sense, but to not bail out now could destroy our country, destroy states already close to bankruptcy, and literally put us in the worst depression of all time.

Quite simply, WE have NO ALTERNATIVE.

"This year will be remembered not just for the worst financial crises in American history, but also as the moment when economists abandoned their principles," writes Oliver Hart, a professor of economics at Harvard.

We all know, it's a new bail out each day now, with a shell game move of dollars, and Congress, inept in general about business, acting the tough guy.

Many economists argue what would have been so bad about letting Bear Stearns, AIG and Citi Group go into receivership. We know the argument that economics are now intertwined, and a systemic failure could occur from the contagion.

Rules must be set for this money flow, yet those setting the rules are themselves corrupted by lobbyists.

We will find that much of the shenanigans in the past 4 months, of government moves, will later be found to be influenced and beneficial to a few, and the many will again be paying.

From Subscribers:


"Floyd,

I wanted to get your opinion on what happened today. I noticed this morning that the plunger team came in a held the market because I watched XLF and noticed that they were buying the financials. I therefore bought 2 calls this morning instead of the put.

I also was watching IWM and noticed that the speculators were coming in a buying. This went on back and forth all day. I then sold the calls by the end of the day.

My only concern is that I wanted to buy 4 shares of the OEX 350 put at 2.50, but something went wrong I guess with the trade and I must have typed 18 instead of 4 contracts. So now I own 18 contracts of the 350 put at $2.50 and did not have any time to hedge.

My second concern is that the plunger team comes in on Monday and breaks through the resistance of 900 area of the SPX. If it does this then we can go to 1000 and hit the 50day moving average and then are puts are worthless. Should I buy a couple calls to hedge my short position on Monday morning if this does occur. Only reason is because I have way too much money on the put that I cannot afford to lose because of my transaction error.

This rally really stinks because it is only a short covering rally with not much volume."

Floyd: See our Dow projections below, and our new signals. Calls have the "count" but Friday's rally was indeed suspect. At the same time the market did hit one of our Dow projections lows Friday, and a bottom test may have been completed. If the market rises 100 points on Monday we'll confirm a rally.