The bounce today

Market:

1. Market had a very strong bounce today, after touched a low that broke the 12000 level for Dow for the first time since last November.
2. But take a closer look, the bounce is mainly driven by the buying of large cap in Nasdaq 100, other sectors don't have as strong bounce as it appears in the main index. So the bulls tried their hardest to paint a better picture for the market.
3. I don't trust this bounce, and think it's a trap to lure more people in before take market down further.
4. I continue to believe that yesterday is the start of the next down leg, which is about 5-10% lower than today's level. We don't have a subprime crisis that can be erased in a few days in the market. In 1998, the LTM crisis and Russian crisis, also coupled with Yen carry trade unwinding, took the market down more than 20%. So I think this time around, a 10% correction is almost certain, if not a 20% correction. So far, the market's correction is less than 7%.

Things learned from recent market actions.

1. Yesterday's sale of March puts on QQQQ and RIMM turned out to be great, even though today's low is the best selling price.
2. This again proves that, in options, it's better to take profit when you have chance, you never know what's next for the market.
3. Even though I try to predict the long term trend for the market, it's almost impossible to predict daily activity.
4. I will not add RIMM puts any more, if I'm right, the existing puts that expired in June, Sept. and Jan.2008 should recover all the loss and some more.
5. I'll focus on overall market, financials (subprime), PM, uranium and other speculative plays.