The markets gapped up on Monday as Bernanke's confirmation appeared more certain.

The gap higher did not last and our short calls were filled near the highs of the day. This is exactly opposite of what we have been used to getting where the gap went against us on the put writes.

The markets eased back by days end on fears that Apple earnings might upset the Apple cart and take us lower. Apple beat strongly but still traded in a wild range from $195 to over $208 but appeared to settle about where it closed the regular session at $203. This should not have a strong impact on Tuesday's open.

The market felt heavy today and I believe the odds of a continued decline are still strong. However, the good news from Apple could make traders think more positively about Microsoft on Thursday and try to maintain a bullish bias. On the flip side a two-day Fed meeting starts tomorrow and that could weigh on the markets.

We are setup for a decline and hopefully we won't have to wait long.

Jim Brown

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