todays market

I expected a very hawkish statement today based on the numbers that have been coming out the last couple weeks. GDP numbers were strong and most economic numbers have been good, with possible exception of Chicago Purchasing managers numbers out this morning. Gold has been buoyant, while oil has found a bid. Seems like market prognosticators like Bill Gross www.pimco.com and others like John Hussman www.hussmanfunds.com/ are again pointing to all of the things that can go wrong. Mkt seems scared to me and spent a good part of the last two days selling, with plenty of people apparently going into the fed meeting short, or at least with a bias to the downside. Todays benign comments from Gentle Ben ignited a stock rally, while the euro rose against the dollar, further supporting gold and gold stocks. Mkts that go up like to climb a "wall of worry" and their is one steep wall of worry out there. I think stocks go higher, but am also betting that we are about to enter a period of above average volatility, which leads me to want to own options, especially LEAPS, with the Jan 08 or 09 handle.

The VIX tried to find a bid in last few days, but today, it got wacked. Think this is short term and that long dated calls will benefit from rising stock prices and rising volatilities, even though the vol increase might not be in the immediate future. In this vein, Before the fed announcement today I bought Jan 09 $10.00 CSCO calls and the Jan 09 $10.00 INTC calls. I also like USG on a turnaround here. It benefits from the Buffett put, and housing stocks have great action here and USG should benefit from the pin action.