10/2/2007 10:02:08 AM Pacific Time At this point the market is following its expected path after yesterdays record smashing run up.  What a day!  Watching the tape you can see Buyers are still in the game looking for the right trades and Sellers are reluctant to move out of position for fear of losing out on the momentum.  Big move going on in the homebuilder stocks.  Many, that can look down the road, pass the first curve, can see the buying opportunity here.  I think the strong demand could be sending a signal that some are believing that the bottom is near and now is the time to move back.  The surge in homebuilders can be a precursor to more positive moves in the credit market and the plague affecting anything that has mortgage in its name.  I hope so.  This quarter we need to see some cooler heads.  The manic panic that has devasted the market needs to recede back to a more realistic marker.  Citi's write downs officially reported yesterday is part of the penance that we all are paying.  But lets begin to heal and again start to deal with the reality of the mortgage industry.  Right now, people with excellent credit that can document income are being treated very harshly if their loan request is above the FNMA limit of $417,000.  This is ridiculous.  This would be the perfect time, and is actually past time, for the Capital Hill gang to seriously raise the limits allowed.  To ignore this is to ignore the reality of the market.  Someone has to wake up and take a step.  Housing data reports huge inventories.  There are buyers out there and we could begin the road to a recovery if we made a changes to how we view good credit risks.  Fact is, it will take us some time to work through this mess but why not get started this month? If credit markets were a little friendlier we could begin the journey.  We are all culpable since we participated in the mortgage business over the last several years, but haven't we been in the stockade long enough?  Good people need loans. The rumor mill is in high gear, with several companies actually looking for suitors, and others that are said to be potential targets. Some of these names include: > Protein Design Labs (PDLI) > McAfee (MFE) > Sallie Mae (SLM) > Cheesecake Factory (CAKE) We aren't going to force the issue here. There are a lot of stocks that look yummy, and we are refining our list each minute, but right now we'd rather take a break. We issued some profit alerts  primarily on option ideas. Hold some cash and be prepared to put it to work.