A Story To Help Us Trade

90% of all guns recovered from crime scenes in Mexico come from U.S. gun shops.

VIX on Tuesday closed below 30, the first time since Lehman Brothers collapsed last September. This is meaningful, as VIX tracks the OEX and S &P 500, and tends to rise when stocks fall, and fall when stocks turn up.

A year ago, before the credit crisis was "admitted," VIX floated between 10 and 20, hitting as high as 80 in October and November. As the market began to recover this March VIX stayed above 40, suggesting investors weren't convinced the worst was over. The Dow is up 29% since it's low in March, but still down 3.4% in 2009. VIX is confirming that the market appears to be settling. Typically there is reaction to "calming," a more severe consolidation, before supportive upside.

The FEDS midday cut GDP for the 2009 forecast, and raised unemployment numbers, and this triggered sell off. But, we'll tell a bit of a story on this to help us trade:

1. At 10.30 a.m. I ran another Dow pivot point/support and resistance calculation, and noted that the market had gone up beyond the pivot point to the newly calculated R1. I bought at 8.10, and sold hours later for 12.40.

2. From there I saw the market move back to the pivot, and down to S1 where I sold the put for the profits.

3. I promptly rebought the June420P on market upswing, and sold again for 1.00 profits. This means I made 5.30 per contract of profits on this put before 3.30 p.m.