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Tuesday, September 12, 2006

The Dow gained 101 points on heavy volume. Advance/declines were 3 to 1 positive. The summation index should be back to pointing up. So now we have a dilemma. I want to get the OEX puts but the market is signaling higher prices. I had said tomorrow would be the day to buy puts. I think I'm going to stick with that. The puts I'd like to get are getting very reasonable pricewise. It is option expiration week and that could skew the prices one way or the other. If we go higher tomorrow, some divergences will appear. I have been waiting for this trade and I'm going to do it. I think it will be a good one. As always, I could be wrong. The market does strange things sometimes. There is an extra week on these options so they are pricey. None the less, if we get any strength tomorrow I'm getting them. There should be some early follow thru. We'll see. Gold was down a bit today and we are under $600. The XAU broke 130. Volume was good here as it tried to rally but the money is leaving as quick as it can. The money from commodities is finding a home in stocks. I think that is why we are rising here. Just a guess. But we are entering what should be a period of weakness. I'm going to do it. Mentally I'm trying to stay true to my conviction about getting the puts here. I'm ready to do it. Unless we are down from the open, I'll be buying some puts.

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