It seems like the end is near because volatility is going up and there can be many many catalyst next week that can make the market finally test it’s lows.  If it doesn’t hold it’s lows, program trading will take over and begin to push the market into bloody unbearable levels for a bit before common sense comes in.  We are all waiting for it.  The patient types are all waiting on the sidelines.  The smart money is waiting.  The vultures are already short.  The pigs and the hopefuls are currently long.  Volatility hit 26 today.  To hit the magic 30 number, there is about 15% move up to get there.  It can very well happen.  It can be Monday with Lehman buyout announcement and AIG meeting.  Also with earnings from the investment banks and the Fed meeting, we are in for a lot of information.  But this sounds rather bearish but the market is still a little bullish which is odd.  This is a once in a lifetime financial crisis, in fact one of the biggest in the last 25 years…perhaps worst since the Great Depression.  We shall see.  

On the other hand, it looks like the dollar is going to reverse with the increasing probability that the Fed will cut rates again.  So the commodities will move up again.  So I guess they have put in a short term bottom.  I will have to get out of my POT short soon but I think there has to be come uncertainty first.  

Disclosure: Short COF, RTH, KSS, RIMM, POT

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