It just came to my attention that the National Bureau of Economic Research has declared that we are in fact in a recession. To top it off, they said it started in December 2007. My work is in the stock market, and my wife is a real estate agent, so this was obviously a major shock to us! She has been so busy doing open houses with zero people showing up and I've so busy consoling people who are losing chunks of their retirement accounts and comforting numerous friends who have lost their jobs that we did not notice that anything was any different with the economy.

Alright, maybe you noticed I am being a bit facetious and cynical here. Here is my point: we get it. We have been living it daily, so why do we need someone to tell us it is rough out there? Am I really going to trust these folks to tell me when it might end so I can comfortably dip my toes into the market consistently again? Let's see, they were about 9 months late (or about 40% in the broad based market) in pointing out what we already knew. So if I wait for the all clear sign from them I may be about 9 months too late if I am looking for a rebound.

I just want to implore folks to stay aware of all the information and news the economists and prognosticators are offering, but at the end of the day, use your own judgment in making trading decisions. Realize that the majority of the people advising folks did not see this coming and may be off on future predictions. Let's just process all the information we can get our hands on and make the best decisions we can.

This market is behaving in ways I have never seen in over 20 years in the business, so I am remaining very alert at all times in my trading. I am learning new ways to trade to be profitable. I realize this current trading environment is an anomaly, as you can see by the chart below. We probably will not see another year like this in our lifetime. I expect the market to return to a less volatile state within the next year, and I will reassess the strategies which may be beneficial in that environment. My point in taking us down this road is to encourage you to use this wildly volatile market to experiment with more trading strategies using options, stocks, currencies, futures or whatever products you like, and load your arsenal with more strategies. Of course, you should do it on a very small basis with tight stops and heavy monitoring to protect yourself. If you take this time to explore and learn, you can avoid being a one-trick pony in the market which is clearly tough these days. The strategies of yesterday are not producing today.

So what exactly am I talking about? I still sell option premium on a regular basis, but now I try to take advantage of elevated option premiums and sell spreads much wider than in the past. Additionally, I look for stocks that I think have nice rebound capabilities and I sell vertical put spreads or naked puts on them, depending on my risk tolerance. Finally, I look at some butterflies as they are so inexpensive due to the volatility and movement, which makes it nearly impossible to pick a landing price for a stock. Keep the helmet on and good luck!!

thinkorswim, Inc. and its registered employee, Steve Quirk, do not solicit or recommend any form of trading in the individual stocks (or their derivatives) mentioned above. Please do careful, independent research before investing any money as well as weigh the possible consequences on your particular financial situation before doing so. The risk of loss may be substantial.