The market may be back but don’t confuse that for the end of the recession.  I think we may be approaching the bottom of this recession based on what I’m seeing in the energy market and other data coming out.   The Fed announced it was raising the discount rate from 0.50 to 0.75 and that seems to have caused the dollar to rally a bit so we’ll see how those call options pan out next month.

The Federal Reserve on Thursday announced it would raise the discount rate at which commercial banks borrow from the central bank as part of a move to withdraw emergency support to the financial system.

The discount rate will be increased on Friday from 0.5 per cent to 0.75 per cent, moving the spread over the main federal funds rate to a more normal level. The length of loans will also be shortened to a maximum of overnight.

The economy is still a mess and unemployment is still a big problem but in talking with a few people, we all agree that many people that have jobs now are doing the work of two or three people and this can’t be sustained for much longer.   At some point, hiring will need to start climbing back up before the employee lawsuits start flying!

So I decided to do what I thought I would never do and bought 200 shares of SWN and sold the September at-the-money calls to rake in $1,100 (12% return) for 7 months out.  Not too shabby!