So there I was, walkin’ around my favorite little place by the sea.

What did I see? I saw the sound of the ocean. I heard the light of the night sky. I dreamed I was dreaming. I still might be. It was everything the fairy tale life should be. Replete with stories of what was and what will be. Laughter, lots of laughter. And of course, lots of volatility.

This upward move we have seen so far is so so. In español así así. I am unsure how long it will last. As I write ($SPX) Futures are +23 so we could be looking at another gap up opening tomorrow morning. We shall see. We shall see. I was out at sea, and out came volatility with me as the ($VIX) ended the day at 54.99. That was off 14.96 points or -21%. We are in new territory. New lands. The cocoon is not the cocoon anymore. The butterfly is free. The crazy movement will continue. Opportunity abounds. Opportunity always abounds in the land of volatility.

My book? Oh yes, my book. The one I am writing? No. My book. On to my book, my chips, my bets, my money management, my chances, my tickets, call them what you will. What do I own that I anticipate selling for more value than it is worth at this moment in time? Well my two favorites of course. Downside insurance in Visa (V) and Prologis (PLD).

In a conversation with a trader this weekend, he mentioned the IPO price for Visa (V) is $44. It isn’t surprising to see some hope in that name at this level. Unfortunately, the volume was pathetic. I am undeterred at all. Visa has a passport, or a visa, straight to $22. It is just a matter of time.

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Prologis (PLD). Nice volume today. Not.

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As far as my other book, it is a science fiction novel. I’ll let you know the title as soon as I figure it out. Let’s just say that the main character is a private Eye (A PI). P. I.
He’s quite entertaining really. At times he’s the life of the party. At times he’s a Fly on the Wall. Whatever form, he lurks. When he enters the room, things get real interesting real quick. His first name is Mestir and his second name has several syllables and rhymes with incredibility.

And that is it from me. Today 10.13. I’ll see you when we shall see. Good night.

Mr. Volatility

Were you short this crash? Have you made huge returns?

If so, put yourself in the class with Jesse Livermore, Joe Kennedy, and WD GANN circa 1929.

For the record, I was short the crash of 2008.

Peace

1. Visa (V) short

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2. Prologis (PLD) short

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3. I am watching Garmin (GRMN) for a potential short entry.

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Immanuuel Kant, in my view, created a great schism in the world of knowledge and between the people who think about it. The schism was the separation between those who think about and experiment with the natural world (today called scientists) and those who think about how scientists think about the world (today called philosophers of science).

-Heinz Pagels

In my view, I am creating a great schism in the world of Finance. I am separating market participants into two distinct categories. There are those who think about and experiment with markets (today called traders) and there are those who think about how traders think about the markets (today called volatilists).

-Mr. Volatility

Peace

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Yes. I am calling for a rally. How big? Not sure. Have we put in THE bottom? Not even close. But I think we will rally here.

Energy names look to have put in a short term bottom.

Financials have been ripped to shreds.

If financials don’t go down and energy rallies, the S&P ($SPX) will go higher. If Financials rally and Energy rallies, then the ($SPX) will go even higher. I’ll say two upside levels are 1288 and 1324.
As far as the NASDAQ ($COMPQ) goes, it looks very bearish, but many of these names are stretched way down here. A bounce is in order. Ultimately, I see (RIMM) at 45, but we won’t go straight there. I expect a bounce.

So where do I own insurance? I own upside insurance in Valero (VLO), I own downside insurance in Prologis (PLD). I am also inspired by some other ideas. Next week, when I am listening to the trading pit and watching the price action, I will decide if I find further inspiration and am compelled to buy or sell some volatility.

Peace