These are without doubt the wildest and strangest markets we have ever seen.  And without a doubt it is tempting us to break rules, take risks and question long held values.  On the one hand prices are at eye popping lows and we feel (based on fundamental economic analysis) that prices will recover in time.  If they don’t it will be the first time.  We remarked in our last letter that buying C would be dangerous in that you never know whether there will be a second or third or fourth bottom and it is a trade for cavalry troopers.  So we took the trade and bought C at the bottom.  We justify it (to ourselves and those of our critics who are dying with laughter) as a trade made with “lottery money”.  Furthermore one rule of ours it did not break is the rule to vary tactics.  As is well known we don’t recommend ANY trades or issues to our readers.  We read the charts and depend on our readers to evaluate our commentary and act accordingly.

Why did we do this?  Look at the pattern of gaps.  The last gap looks like an exhaustion gap and there is such an air of panic that it fits the Wyckoff panic model.  We could have scalped it, but scalping is not interesting to us.  If this thing closed off the low 2% we’d cut and run.  Otherwise we hope to look at it in a couple of years and tell war stories about how we caught the bottom.