But being as this is a .44 Magnum…

Harry Callahan: I know what you’re thinking. “Did he fire six shots or only five?” Well, to tell you the truth, in all this excitement I kind of lost track myself. But being as this is a .44 Magnum, the most powerful handgun in the world, and would blow your head clean off, you’ve got to ask yourself one question: Do I feel lucky? Well, do ya, punk?  – Dirty Harry

My spidey-senses are telling me that  we’re experiencing some relative calm here before the next big storm. This market is either a coiled spring about to put on another 5-10% move higher…or it’s a ticking time bomb about to crash 5%.  And I’m thinking we’ll see such a move in measured in days, not weeks.  That is, this is a market that’s likely got a binary outcome ahead of it.  Steadiness doesn’t look likely. Volatility is ahead.  You can buy volatility by buying VIX calls or shorting VIX puts or you can buy both calls and puts on the broader markets and in your individual stocks in the hopes that the increased volatility will increase their value no matter which direction the next move goes.

Or you can, as I’d noted in my earlier post, place your bets and build your portfolio like we have with lots of upside leverage on continued rallies  (those Apple calls that I’d been buying during the August crash are really kicking in now, for example) but that will work as natural stop losses below their strikes…and keep bullets in the gun ready to shoot if and when the next opportunity arises.  I’m not making any moves yet again today, though I’ve got a feeling I’ll be doing a lot more both buying and selling if the markets go crazy in either direction as I expect that them too.

I’ve also got a couple new names I’m going to be adding this week too.  Finishing up my homework, making calls on the company and to the company’s manangements and what not before deploying the additional capital.  Before shooting more bullets.

Dirty Harry – Do you feel lucky?