Now that the cheers are over

We begin the terrible dissection of what just happened Sunday. I am a bit surprised that 300 million taxpayers putting 5 trillion into this only saw a 300 point rally in the dow. This is an example of things to come.

So where do we go from here? There is no argument that housing loans will now get cheaper. In fact housing loans have been the cheapest in a lifetime most of this decade. So that is not new. What most are missing here is that just because loans are going to be cheap, who is going to make the loans?

It is like every time I make a trade, someone on the other side has to take the opposing view for the trade to go through. For every loan, there has to be someone buying the paper. Just because the feds are going to be there artificially buying these things does not has not will not change the fact that Real Estate is still going down. Homes are still in record foreclosures, housing inventory is still million in surplus and getting larger. So as an investor, once I come down off my cheap credit fix I will be once again looking for the next high. What part of our freedom are we going to give up to make our junkie habit feel good again. When will it stop? After the auto industry, the airline industry, etc. Once we all become shareholders who or what is left?

Once again after the dust settles and we begin to understand what we just did, the only stored wealth will be gold, silver, oil etc.

It sounds like a record, but as long as the feds keep with the same tunes the same tunes for investors hold true.

As option traders we need to focus on the trend and buy out far enough to not get trapped in the violent swing these knuckleheads in Washington cause. Then as the trend continues we are there. But we have to remember that time is eroding our value each day. To compensate for this we sell closer options to collect time decay in our favor while we wait for the trend to do its thing. Often times corrections appear to be trend changes. Most of the time the talking heads can make us feel that we are wrong. Do not listen to them after all they are for entertainment value and to make the masses feel good about the investments they have made. We all know how the masses come out in the end.