George W. Bush And John Chambers Tag Team The Bears

getting ready to travel to the
conference in Las Vegas, so please forgive the brevity of this posting.

President George W. Bush and Cisco’s
Quote |
Chart |
News |

John Chambers combined a pretty dramatic one-two punch that
seems to have sucker-punched the bears over the past two sessions. George W’s
up to $75 billion in tax cuts and
spending increases, which should help lift the world’s biggest economy as
evidenced by its 30% move over the past two sessions, and CSCO’s rosy outlook
is also making a positive impact.

Trading in the options pits is quite active, but the volatility crush has made
trading, which is always challenging, exceedingly taxing. Traders here on the
floor are forced to deal not only with the runaway market, but volatility
contraction in the 40 — 50% range. That means a particular stock or index may
have rallied 20 — 30%, but the out-the-money options could be nearly
unchanged. If you are not nimble in defending against such a devastation of
volatility, you are pretty much screwed.

I will address volatility contraction, bull call spreading and some repair
strategies at my talk at 2:45 PM Saturday at the Venetian in Las Vegas. If you
can’t attend, please check us out on the web at,
for another one-hour version of Doctor
J & the Traders
As usual, the show airs live at 4 pm CT, but cycles throughout the weekend and
is also archived on the site.