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Since we had the call that eliminating the short selling ban would create a stock market crash (the SP500 is down -24% from our call on 9/19/08), we think it’s fair game for us to own the debate as to the levels where we mop this mess up. It is time to buy stocks, patiently, as the levered longs get hammered with redemptions and sell low. They weren’t proactively prepared. Now you’re seeing them manage their books reactively.

I see 3% downside right now, and 16% immediate term upside. Here are our levels for the SP500:

BUY STOCKS = 922.53
Sell the “Trade” = 1070.33

With the SP500 at 948 at the time of this note, we’re going to be deploying more of our 79% cash position. I have never understood why people love buying everything on sale, other than stocks… but I guess that’s their problem here, not ours. Crisis creates opportunity.