Japanese Earthquake - 3/11/11

 NOTE:  This is an educational piece intended to teach the various aspects of trading.  There is absolutely no substitute for hard work to adapt a trading method suitable to your personality and psychology.  The intent of the information provided is to make you more aware of the risks associated with various forms of trading  We recommend a specific price for the short term for trading between the times of  8:15 AM until 3:00 PM eastern time only.  Therefore, if the price is at or ‘better than’ our entry point, that is the price that you execute.  Then take the point of execution and add or subtract the stop loss and profit objective.  Because of recent volatility, if the price moves 10 points away from our entry price and we were not executed, DO NOT enter the trade if the price action reverses and goes to the specified trade entry point.  If you have any questions on this drop us an email or fax 330-484-0330.  MARKET INDICATOR    

SHORT TERM:

 Japan was hit by an 8.9 quake overnight which is the 7th largest every reported. It is difficult to assess possibilities on the stock market regarding natural disasters. This market is reeling in recent days but still has not pulled back 50 S&P points. I think there is more risk from middle east tensions growing than from the earthquake shock having a lasting effect.

 INTERMEDIATE TERM:

 I am concerned for our short positions because I believe Bernanke will come in  and support stock prices today. Cover your short position on the opening and take the profits. This market should have had a greater devastation with the problems in the middle east and then the Japanese earthquake. We should have easily seen 20 more S&P prices downward overnight. Since we did not this is a stronger market.

 PLEASE NOTE TO COVER SHORT POSITION ON OPENING TO TAKE PROFITS ON INTERMEDIATE TRADE!

 INTEREST RATE OUTLOOK:

 We have Retail Sales at 8:30 am est., Consumer Sentiment is at 9:55 am est. and Business Inventories at 10:00 am est. The bonds hit just above 121 in overnight trading as panic drove prices higher. However we are very overbought in the short term and any stability regarding the world situation will pull bonds back.

 Sell the bonds at 120'27 and if executed we will update the parameter in the afternoon advisory.

 SUGGESTIONS: Under no circumstances do we recommend naked options. – Past performance is not indicative of future results. The Cook Cumulative Tick SM is one of the primary indicators used to determine a potential trend movement and is proprietary. The bond positions must have a 3 point hard stop in place all day every day in addition to the stop loss indicated in the parameters section of this advisory.