I told my daily video subscribers Wednesday morning before CPI that the market needed to go lower first before it went up. Such that no matter the direction of first move after the CPI release, it was likely to be reversed, because one way or another we needed to go down. The move down in the morning served its purpose in spades. It was violent and felt horrible, and certainly made my bullish conviction waiver, even though I was expecting it — in other words it did its job perfectly! The reversal was impressive. Six seconds before the SPY close on Wednesday massive call option buys hit the tape. That augurs well for upside continuation.  The attached chart shows the magnitude of the extraordinary 14 point APY rally off the lows. 

Let me shar my "Eureka Moment" as a trader: The single most important lesson I learned... and why this catapulted me to success as a trader. (I've never revealed this anywhere before.) click here:

TLT is in the hedge area. Selling the short term calls against the long term calls bought at lower levels. Nothing really can go wrong in that scenario except perhaps a real collapse in bond prices, which seems very unlikely. Interest rates are very unlikely going up so there is a natural floor on bonds. A correction is a chance to reload the long term calls. 

Thanks,

Joe