Excerpted From Alchemy Live! 5/15/08
2:44 When you look at the volatility we've had in the past month in the NASDAQ for instance, every time I've seen volatility like that, I don't care what the market was, whether it was soybeans in '76 or '83 or whether it was silver at the top in 1980 or whether it was some of the biotech stocks at the top earlier in the '90's, when you get that kind of volatility you know that generally that's associated with a top.-- Paul Tudor Jones, January 2000
Does this apply to Crude Oil and other commodities right now? My feeling is that there is a bubble in Rice that is boiling over....so to speak. It's not a joke -- there are ongoing insurrections in 33 countries over rice prices. And San Francisco is next. I refuse to average down on rice because it's unseemly, perhaps even unmanly.
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2:27 June Crude now back over $124, a 6 Point point large range day
2:19 The general idea is that you are long things and short things and the longs make more than the shorts lose when the market is 
acting right and you have any expertise as a stock picker So I should be worried about bailing out of those puts as my longs take off, but in this market it's much harder for that to work. Tomorrow we may be down 150 points and I'll be walking on rubbery legas because I'm not short enough. Of course, I could be 30% or so long and the rest in cash, but I'm trying to pull more out of this lousy environment and it may not work out too well, just creating more money for the brokers and accountants, and only Karnak knows for sure
2:11 Mark Fisher Logical Trader "A Ups" today on the Spiders, QQQQs, IWMs, and TLTs....big evil faderooni "A Down" on FSLR
2:03 Everyone's got a reason that VIX is wearing a 16 handle and 
I've got my own -- ever since they came out with those VIX options -- what, 2 years ago? -- it's acted differently
2:00 Final Laps
1:57 I have to say that I don't recommend all this buying to anyone else -- it's an "iffy" market to be sure, but for managed money I'm going to be a little more active and pick these long puts off if they start to make money, put them back on again, basicaly trade around the long positions. May buy some out-of-the-money puts on individual names also. If the puts start to bleed I'll reduce quickly
1:35 5 Minute Spiders
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12:52 I'm getting frustrated with these oil & gas stocks. Crude is cracking -- along with Natural Gas -- after a bad gas inventory report. I've bought some other stocks -- AAPL, CLF, BUCY, US Steel -- and some Spider June puts which will be updated down at bottom of page shortly
12:00 The UBS take on energy follows JP Morgan Chase & Co.'sdecision to trade oil by the end of the year – the physical stuff, as opposed to futures – on the expectation that oil could rise to $200 a barrel.
Oh, please....that's bad karma
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That Bug Again 5/15/2008 11:58 AM
I don't think it's smart to talk about what's "appropriate" for the market, but I do know that Volatility is mean reverting, and I'd take the "over 18-19" for the VIX looking out a couple months.
Today it's mostly oil & gas, and there are so many stocks in this sector coming across my desk every day that could or should be bought that it's hard keeping up with it.
Today I see Statoil Hydro (STO) up 5% and I don't own that, but I also see Petroleum Development (PETD) ahead 4% and I do own that. I could go on with this but you understand.
I also own Chevron calls in my own account which are doing well, but I made a mistake in not selling all the First Solar calls this morning. You know what the latter was? The idea that I would hold the balance until they made me rich....bad idea, and I still fight that "get rich fast" bug.
Hope you are faring well and see you after lunch.
Stephen
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