HEAVY PUT BUYING ALL DAY

After an initial surge of put selling this morning which set up a bounce, we dropped dramatically.

Then we saw call buying = bearish. And prices fell further.

Then we saw heavy put buying = bullish. But prices still fell until VIX hit 80+.

We have now just seen a massive rally from DIA 82.40 to 85.33 as I type.

The rally turned after the YEN surged and surged and surged to reach 10460 on the futures, which is up nearly 5% from 5 days ago. This is putting massive pressure on anyone who borrowed Yen to finance ANYTHING in the past few years.

Based on the overall action here today it looks like we could see a MONSTER RALLY.

Why?

Put selling at 70+ VIX is institutional grade BULLISHNESS.

This tells me that the smart money is loading UP on STOCKS.

I want to take buy signals after 3:30PM because that's when they can MARK UP their new purchases to show a profit on the day.

So:

Buy at 3:30PM

RISK 1.00 DIA

EXIT ON CLOSE

3:19PM NOW
Thursday, October 23, 2008