Don’t Fight The FED – Fight The FED

Ok, this is now a fight between the FED and us bears.
We have had the upper hand from November to January.
Since Ben Big’s cut on January 15, he bought himself a rally.

So we made extremely good money from November to January 15.
Then our short positions have taken a hit.
Yes, our short positions have suffered.
But not nearly as much as some might think.
Implicit volatility has gone way up and lifted short positions.
Our April puts are down a tad, our January 2009 puts have hardly moved at all.

This is the time to pick up Sun Tzu’s “The Art Of War” again.
This is war between the FED and reason, bear.

Sun Tzu, Art Of War, full text free.

Only enter into a war you can be sure of winning.

You want to fight a war with the FED that the FED can’t possibly win.

The FED can win in the short run, hey he has another 200 points to go down to 1% and he will use it.
But in the longer run he can’t win.
The tsunami is coming, and no dam Ben Big can build can withstand this wave.

If you are looking for safety move your put positions further out in time, to January 2009.
If you are more risk prone, stay put in April and wait for panic to set in.
Move forward as needed.

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