Recession Exposure

[james_gsx]

Even if we have hit bottom, I still wouldn't feel comfortable investing in any normal stocks. I still think we'll be in a typical bear market scenario for a while. But that's just my opinion that I got from my own research. And that's why I'm looking for a longer term hedge like gold and bonds. When I think we'll go back into a bull market then I'll start pouring my money into stocks. If I thought we'd see a crash or something like that I'd load up on ES shorts.

[nycdweller]

Does anyone in here invest in LEAP's?

[james_gsx]

ES down 6% from last night. This could be interesting tomorrow morning...

[OAC]

	Quote:	james_gsx
	ES down 6% from last night. This could be interesting tomorrow morning...

Wow, that is exciting. Most people pay attention to price, but I did a little timing work this past weekend (Nowadays I don't take any significant position unless, Price, Time and Pattern all come together). Just like price, where you may find confluence of support and resistance from several major levels like weekly pivots, 200 day ma...etc. There is a confluence of several time cycles due this week. Also if you notice, the first leg of the drop from 10/11/07 to 11/26/07 took 30 trading days, and the second leg of the drop from 12/11/07 to last Friday is 26 trading, so a few more days of the drop will still produce time symmetry. The Butterfly Pattern I mentioned last week can still be valid according to Pesavento(the originator of the pattern) but get extended from 127% to 162% of the distance of the rally from 8/16/07 to 10/11/07.
Since it is a Big Butterfly, the next extention would take the Dow down to 11,000. Because of several time cycle due this week, I didn't think Dow can still drop another 1000 points in a couple days. Now with the Globex down 6%, we are already halfway there. Wow !!
If Dow goes down to 11,000 this week, loading up on OEX call options would be the way to go anticipating a huge bounce . The way I look at it, the only way that we don't get a bounce at the 11,000 level is a complete meltdown of the Derivative Market . Trillion dollars worth of highly leveraged derivative products had been built up in the last few years, it is like an accident waiting to happen. If that happens, I will lose all my option premium, but then a Derivative Meltdown will throw the world's financial system into the stone ages. we would then have very little worry about a recession, because depression will be the word of the day.