$Nasdaq Composite Index (.IXIC.US)$ let's talk about some ps...

Monday where Dow futures were down over 1300 NASDAQ down over a thousand 30 at this point in time seems like eons ago but it was just Monday.

we had a v bottom put in and for those that had the brass ones to buy I tip my hat to you either you bought when there was blood on the streets you got lucky and you had a limit order that got triggered or you didn't know any better and it was your first time investing and you just so happened to step up and pull the trigger and buy.

I congratulate you all you're smarter than I am. because I was so risk averse and so concerned of another leg down I sold naked puts below where we were and collected premiums on a variety of stocks and baskets however while I made money this week the people that bought the stocks the equities the tech stocks that were ripped apart you've killed it.

today everything's hunky-dory everyone's in rally mode the news media the bobbleheads everybody is buy buy buy and I will tell you that you need to be very very cautious in here.

the US economy is still slowing it didn't reverse just because yesterday we had this massive rally and now the story is on Bloomberg and all these other financial outlets are saying the fear of recession has subsided ..really? one day does not a market make somewhere along the way I've heard that.

so you're sitting on a boatload of cash because you did not buy on Monday raise your hand that's me maybe you nibbled a little bit along the way this week raise your hand that's me however you're still sitting on a boatload of cash and the markets rallying again in the morning the tech stocks are on fire again?  what do you do?

there's two things that you can do number one you have to divide your purchases up in groups so whether it's $1,000 $100,000 or a million just as I said earlier this week nibble and you can go back and read my comments if you want to buy soxl, or you can sell a put when it was around 28 you can buy the s stock / ETF or any other company that I highlighted but only deploy a quarter to a third of your money at a time.

so if you want to buy today knowing that there's an enormous amount of profits from Monday's low to today even though you pull a monthly chart and compared to where we fell we barely made a dent you have to understand that we could reverse and 20 to 30% of the gain this week can be wiped out in a blink of an eye.

so if you buy today number one nibble number two my suggestion would be to sell a call against it for next Friday's expiration or the following is Fridays 5 to 10% higher than the current price of the stock or ETF.

yes you do limit your upside because if we rally for the next two weeks or week it will get called away however you never go broke by taking a profit.

so you got upside in the stock or ETF to the strike plus your premium alternatively you can take a more cautious approach and sell puts below the market more along the area of where we started yesterday prior to this massive rally. if you don't know what selling a put is number one don't do it learn options read about them learn about them.

so if you sell or put it approximately the prices of where we started yesterday on your the stock that you're following or the ETF that you want to own if we get a market reversal on expiration you're going to get put that stock/etf so you need to have the cash available number one number two you've mitigated short-term risk because rather than buying it today you're below the market 5% 7% whatever it is plus you collected a premium when you sold the put. this is the approach that I'm going to be using today because I believe we're going to have some profit taking I don't know when but I have to be cautious and not buy into the sudden euphoria that everything is fine again and we're in rally mode.

that's my two cents