We are living through insane times, but I think this is generally what's going to happen over the next month:

ONE: The markets will bounce higher. The reasons for the bounce will be an extremely oversold condition, the eventual passage of some kind of "bailout" bill, and the sense that the worst is finally behind us. I imagine indexes would spring, for example, back to the area I've tinted below.

And, at the same time, the $VIX will lose its unprecedented froth and sink down to "only" the mid 30s or so.

TWO: There will be a huge, huge supply of charts which had been severely beaten which do a substantial retracement back up to either broken horizontal support or, more commonly, broken trendlines. I am already amassing so large a watch list of these prospective "bounce backs" that it's ridiculous.

THREE: The new catalyst for a downturn will be Q3 earnings, as those start to emerge in earnest three weeks from now. It's going to be sort of like RIMM (although not necessarily to that extreme) for hundreds and hundreds of different stocks. At that time I plan to go hog-wild buying puts on or shorting the aforementioned "bounceback" issues.

Having said all of the above, obviously I intend to scramble out of the majority of my present positions. As of this writing (more than two hours prior to the opening), there is no "big news" yet. There's no surprise interest rate cut, although that could change at any moment, and the GLOBEX on equities have been in the green all night. I am (with the usual caveat – "as of this writing") relieved to have closed out my index put positions. I am hoping that at least the initial bounce isn't so big that it takes too meaty a bite out of my current profits.

We are living in an absolutely unprecedented era, so laying out what I think is going to happen over a month – – which in current market conditions is like predicting what's going to happen over the next fifty years – – is highly speculative. But that's the general theme I'm running with for now.

My kids outrank you. I've got books to read. I'll be back in the wee hours of the morning to write up a post. Until then, g'nite.

As regular readers know, I've been ga-ga over the short position in $UTIL.

I have examined this chart with fresh eyes, and I have decided it is time to take profits on this position.

The head and shoulders on this pattern has always been a bit sloppy. The retracement back to 8/29/2008 is my new neckline (shown as the purple horizontal line, below). The math is pretty simple. 8/29's high was 486.64; the ultimate peak on 1/8/2008 was 555.71; the difference is 69.07. Subtract this from the neckline value, and you get 417.57, the new target price.

Today's low was 420.25, which is extremely close to the target.

Importantly, I took a fresh look at the long-term chart back to 1929. My retracement goes from 4/28/1942 until 4/20/1965, and the extensions of this retracement are pretty remarkable. The 261.8% extension and the high price reached in December 2008 are virtually identical at the value of 418.25.

So, as you can see, there is a convergence at these levels. I will probably re-enter this trade on a serious bounce higher, but I am planning on liquidating my entire SDP position which has provided a nearly 20% return in a very short amount of time (and constitutes my entire retirement account right now!) I also intend to sell my XLU puts in the morning.

I wanted to make a special point of updating this trade as I have been so vocal about it.

Hello Fellow Slopers!

I hope you made a lot of cash today. I think the collective group here has helped each other so much. I am especially grateful to Evil Spectulator (molecool), Moon Trader, Gary, Gagelle, and Master Shake – – I'm probably forgetting some names, but this is just a quickie post.

September 29th was said to be the "biggie", and I'd say we got what we bargained for. I have a couple of important appointments I need to attend, so I won't be doing a post until tonight. But I will share a few quick thoughts:

• The risk/reward on my index puts got so extreme that I sold all of them a few minutes before the close.
• I believe the indexes have been pushed to such deep levels that the opportunity for a substantial bounce is before us. Being the type that puts his money where his mouth is, I bought 100 November QQQQ calls shortly after the close today (you can get these for an extra 15 minutes after the regular closing time).
• I think the juiciest bearish opportunity is actually in the future; perhaps weeks out, or perhaps months out. I'll talk about this more tonight.

Today was the best trading day of my entire life, and, again, the terrific community here is a major part of that. I hope that, in turn, millions of dollars in profits were made amongst the audience here. Thanks, everyone, and I'll write more later today!

We have pushed the market to extremes. I'm getting out.