sold my put positions

We're shaping up for a nice bear market rally tomorrow. I have sold my POT puts for a nice gain of roughly 700 dollars. I also sold my XOM puts, which would have been going for much more later in the day but I sold them for about $100 dollar loss. At this point in the game, I used my raised capital to buy in some down positions, essentially lowering my cost per contract. I bought 5 more FWLT calls for FEB, bought 3 more HPQ calls for JAN and 3 MS calls for JAN. With these I am looking to sell at a breakeven price or slightly higher. I also purchased 5 YUM JAN 09 with SP 35 ahead of earnings tomorrow.

The hard part of investing in this environment is gauging future earnings of these companies. With a faltering domestic economy and a declining global economy, earnings growth projections are most likely to be wrong if estimated today. That means when purchasing a security you have to take this into account...but how much should you devalue the security? I'm not sure of a pricing strategy in this type of environment, which make purchasing puts an easier and somewhat safer investment for the moment.

Regardless, I plan to a portion of these calls tomorrow as cash is king in this type of environment.