Update TVIX

Well, we got filled on our $17 stop order a couple days ago. So now we are doubled up. I have to tell you that we are a little nervous here. Where are the traders? Where are the HFT programs? The Street knows QE3 is already in effect. So, when is the time to initiate operation "Volatility"? I say The traders start now. What are you waiting for? The mutual funds are fully invested, the sheep are in. The retail guys are sitting out and they are not playing. So, who is the first to act in this den of thieves? Act now or lose......and THAT is the word on the street.

Perfect!

It proves our theory that "The set up" is in. Google down 64 dollars after hours! We are very happy. Earnings are poor, the financial system is weak, and volatility should begin to move up.

Very happy we doubled up on our volatility trade going into these earnings. It was a tough bet; however, you gotta be able to make those bets.

The Confusion and Volatility Trade

Confused by the market? To paraphrase Jesse Livemore -" I'm not a bull or a bear, I just bet on the the right side of the market". That seems to be the mantra so far this year. Quite frankly, nobody really knows why the market continues to go up. The financial system is still extremely weak and the printing boat loads of money continues. Earnings have been disappointing as a whole so far. The financials continue to perform "funny money accounting" The volatility index just broke 20 today! There is just no fear in the market at all so far. The volume is low and most institutions have been stepping over themselves to get invested for the 2012 performance race.This is driving up the market on very low volume. What do they care? It's not their money and they do not want to miss the boat or their bonuses by being left behind. I don't buy it and still think the volatility wave is comming.

We added another bit to our TVIX trade at 21.77 today giving us a 22.88 average price. Check emails for strategy update.

Google, IBM, Intel,and Microsoft report after the bell. The easy bet says they will all be up after they report and Google should kill it. This will be our first test of the "set up". It is a no brainer to bet Google shares rocket after posting earnings. Let see if that transpires or we are still in a thin manipulated market. (our hunch is a sell-off...only the bravest would bet it)

Intial Position Placed.....TVIX

We initiated our volatility trade today. We took a 1/4 position in TVIX which is a Leveraged ETF that gives us 3X exposure to the VIX. We bought at 24.15.

We strongly believe a massive hit to market volatility is building.

Now is The Time! The Volatility Wave is Near....

The VIX has hit our target of 20 (actually it only touched 20.05 today) and we are now ready to begin "Operation VIX Wave". There is an abundance of optimism. The troubles of last summer seem to have dissipated. New year money is flooding into the markets. The money managers are positioning themselves for this year's expected returns. What's the problem?

The waters are too calm. The soveriegn debt issues have not dissappeared and the system in Europe continues to be fragil. As the volatility continues to wane, any small ripple can turn into a tsunami. We will begin our accumulation of volatility trades tomorrow with small intial postions.

The time is now.

Check emails for the strategy outlay.