Kass: Live It Up Now, Cuz '08's Gonna Stink

Against the backdrop of an awful tape on Wednesday and Thursday, I suggested buying into yesterday's late weakness in the anticipation of an up morning. Here is what I wrote after the market closed last night:

"As my friend/buddy/pal Jordan 'Kahn' Man would write -- 'gun to my head' -- I would be buying in the aftermarket for an 'up' morning.

"Indeed, I would be following a strategy of buying the dips and selling the rips.

"I continue to hold to the view that last week's drop could define the lows for the balance of the year.

"That is not to say that the upside is great. There is a reasonable upside into year-end considering the oversold and other factors I wrote about last week: economic, subprime, sentiment, political and seasonal.

"While conditions that I wrote about recently might not contribute to a continuation of Tuesday's rally, the odds favor it.

"Nevertheless, smaller-than-average trading and investment positions remain my investment mantra -- in order to take advantage of the increasingly volatile tape.

"It is no time to try to hit for home runs -- singles and doubles will be just fine.

"Opportunistic trading should be our credo in a maturing economic recession in which earnings disappointments will appear with greater regularity."

So far so good -- and congrats to those subscribers who made the trade -- because judging by the strength of the futures, we should have a good opening this morning.

That said, I want to bring up a pet peeve of mine. In general, there is too much dogma around these parts -- both bullish and bearish. (And I am as guilty as anyone!) From my perch, (particularly) in volatile markets and credit woes, rigorous analysis and observation should supersede gut feels and technical mumbo jumbo.

I bent a little late last week and early this week, and I promise, going forward, to reflect my trading/investing flexibility more in my writings, as the Cassandra-like mantle couldn't be further from the truth. (I wish those who appear to be permabulls would begin to bend by recognizing both the severity of the credit problem and its broadening contagion as well as the market's recessionary message.)

The weakness of the last two trading days was anchored on a number of adverse events; it wasn't some mysterious late-day fade grounded in programs or intrigue. Most of the reasons for the weakness are residues of the credit contagion, which, as I have expected, runs deep throughout the world's financial institutions.

One of the foundations for my short-term optimism is that the increased transparency of the credit issues that reside in brokerages, banks and money market funds, though headline-ugly, represent a positive for the markets as the institutions finally are 'fessing up and appear to be more accurately defining their exposure and risks.