I like Goldilocks.

However, she is certainly too young for me to marry. I canít even date her. But I think that it is safe to say that I can buy her an ice cream.

Hey, if you canít be a dirty old man when youíre 65, when can you be?

My approach to the market is quite similar.

I am bullish, but very nervous.

I am trading for small incremental upward movements in the markets in the full knowledge that they could open 10% down the next morning.

This is a market that has jail bait written all over it.

What will produce that? A terrorist attack? A federal budget crisis? A tweet from the president? Not only do I NOT know; it is unknowable.

So this year, risk control is paramount.

Long-term followers of this letter have noticed that I have substantially shortened the expiration dates of my options trades. I never go out more than four weeks and frequently aim for two week trades.

That way, if the world turns on a dime, which it can do any second, I wonít be lugging a money losing position for months, hoping it will turn around, or worse, stop out for a loss.

Notice also that I am going very deep in-the-money with my strike prices.

That way, if we get a sudden 5% correction, an even greater likelihood, I can weather the position and suffer only a few changes of underwear (sorry, trader speak).

When you quit trading at Morgan Stanley because the market is too scary, they take your capital away and give it to someone who can use it.

I am trying to avoid a similar situation with you.

What gave me the confidence to issue a sudden explosion of Trade Alerts over the past week is the action taken Wednesday by my friend, Federal Reserve Chairwoman, Janet Yellen.

On went the call spreads in NVIDIA (NVDA), Palo Alto Networks (PANW), the SPDR S&P 500 ETF (SPY), and Goldman Sachs (GS).

I even had the confidence to play for a brief counter trend rally in Treasury bonds, buying the TLT.

With the Trump agenda mired in the swamp, real trading opportunities are going to be scarce in the months ahead. You have to strike while the iron is hot.

Janetís action was as certain as it was swift.

She suddenly ratcheted down interest rate expectations from four quarter-point rises to only two more in 2017. And those two rate rises may not come until the second half of the year.

Traders lulled into an always fatal sense of complacency with their ever growing short positions were taken out to the woodshed and severely spanked.

The message was clear. Never underestimate the dovishness of my former Berkeley economics professor, Janet Yellen.

The Fed has in effect changed policy direction three times in three months, generating some of the most violent market moves in history. If you can survive this, you can survive anything!

Do you know who the longest lived subgroup of people in Japan is?

Hiroshima atomic bomb survivors. If an atomic bomb canít kill you, nothing can. I learned that when I interviewed many of them in the early 1970s as part of a research project for the Atomic Energy Commission.

Welcome to the club.

Clearly, international concerns were at the forefront. Janet has, in effect, become the central banker to the world. If Europe, Japan, and China are all weak, it is not time to raise American interest rates.

The Fed action on Wednesday sent a generalized green flag out to all ďRISK ONĒ assets. The problem is that it comes right on top of one of the steepest moves UP in share prices in market history.

So, after flushing out a few stubborn, last stand shorts, I think the market will be RIPE for a slow steady grind up. We are not blasting through to substantial new all time highs any time soon, and probably not until year end.

You saw it here first.

And Janet, thanks again for that A+ in economics, and you owe me a phone call when you get home from Washington.

Next year, or next week?

Want an Ice Cream?