Time 3:45

Market comment: Hedging

EPS from two big market components, CSCO & DIS, are out after the close. The markets are at or near major resistance and both companies are vulnerable to the economic problems. CSCO has disappointed on EPS the last few quarters and DIS is heavily subject to the price of oil. I want to take a 1/3rd position in the market averages hedge, QLD, DDM, SSO. I don't believe that a stronger number out of these companies can really propel the markets a lot higher at the open, but the risk of this being the catalyst for a sell off I believe is high. If the numbers are ok we will cover the hedge after the open, but if the numbers create a gap down then a possible perfect 60 min. sell sig. could be in play and we will add to the hedge at 9:45, 10:00 and 10:30.

I want to protect the gains and would be happy if the markets gapped up 2%. We would lose roughly $7,500 on each position but we would be making a lot more on the rest of the portfolio.