Signal 1 Blahs - May 14, 2007

We are now in an S1 regime which is the hardest to trade. The market meanders poking higher with little follow through. There is an underlying bullishness to the market.

The basically strategy is to be short calls when the market rallies, and to short puts when the market dips.

Eventually, we'll switch to S2 but it could take a while. So shorting puts needs to be done with stops to prevent destruction when the winds shift.

I have shorted May 1525 calls, and the May 1495 puts. We are living dangerously! However, I have faith that my system will help me trade out of any problems.