Rock-tober!

First off, just wanted to update the GLD trade. This trade did not break out of the area I wanted it and reversed during the day Friday. Since it did not break out I never took the trade but if you did then you should have had your stop in there and thus be out of the trade now.

So anyway, the sky is fallin' isnt it? Thats what the bobbleheads on tv tell me at least. These are historic times and all you need to do is look at the VIX to see what I am talking about. The VIX (the broadest measure of fear and pessimism) has hit unthinkable levels. With a little more than an hour to go in the trading session the VIX is at 75. A month ago if you told me we could even hit the 50s I would say youre nuts. But 75 is truly something we may never again see in our lives. The only other time fear was higher in our modern world is 1987, but there was no actual VIX back then. Someone went back and did the calculations and it turned out the equivalent would have been a VIX of 150 or something crazy like that.

The market is not bottoming today even though it may have felt like it this morning when we gapped down 600 on the Dow then literally came back to breakeven an hour later. I think we will see another redemption selloff Monday after folks get their mutual fund statements over the weekend and cry over the losses that they are sitting on. This will make then call their brokers on Monday morning and say sell my stocks, I want my money back. Monday could be a scary day if this happens. Nonetheless, I think we either bottom on this event Monday or Tuesday. I do not think this selloff goes further than that. Once this happens, hopefully without the use of government intervention, then I think we will see a massive 2000 point rally in the Dow within weeks if not days.