Suckers Wind

There is a wind of change a blowing and it blows cold and ill for the bulls. This artificial rally --to sell the financials for the sake of the Bear Stearns scam-- is about to suck in the usual suckers i.e. the retail investors just as the professionals are getting out. The main enemy working against you is complacency, technically speaking volatility. Bloomberg must figure that it's about time to give you something helpful to read.

The implied volatility on options that lock in gains if the S&P 500 drops at least 10 percent in three months reached 24.67 on April 30, Bloomberg data show. That compared with 15.1 for options that pay out if the index rises at least 10 percent.

The 63 percent difference indicates the highest demand for options insurance since at least 2005, according to data compiled by Bloomberg. A decline of 10 percent from the S&P 500's closing price last week would take the measure down to 1,272.51, below its March 10 low of 1,273.37.

So now is the time to tread lightly by trading small positions with tight stops, don't go for the home run.