I am quite surprised that the ES (e-minis trading on Globex) is down only nine (1197.00), considering the almost certain devastation that is about to hit New Orleans. I am not comfortable taking about trading, esp in light of the fact that people are going to die (trading in that context means so little--I am having trouble getting ready for Monday's 9:30 opening), but I think that this is a gift. ES may hit 1180 by Thursday. Why? 1. NWS is now predicting 50-99% odds of a direct hit on New Orleans. From what I remember reading some months ago about the city, a category 5 could lead to property damages approx 50 billion (I have seen figures higher--I am trying to be conservative). Death toll is unpredictable, but will probably surprise even those ready for the worst. I think it would be too callous of me (or anyone) to offer off-the-cuff predictions about deaths. Am I some scientific expert? No, but I'll say this: since I live right on the coast, I have a interest (personal and financial) in learning as much as I can about hurricanes. I am no expert, but am pretty well read (I don't mean Yahoo! News or Weather Channel!). 2. Uncertainty over the exact damage will further ratchet up VIX. IV has been so low for so long, and writing options has been such easy money for so long, that one could easily see a rush for the door. Just in time for fall (sigh). 3. The market is already oversold. Markets tend to accelerate on the downside, esp when something comes out of the blue like this. Same with VIX. 4. I haven't mentioned oil, because I have nothing to offer here. If oil spikes, the market will be hit even worse, for sure. Will bottom feeders who bought late last week hold , buy more, or bail? That is the trading question for the week. In other words, the news reports and other sources I have read since Saturday I think severely underestimate the potential destruction. God, I hope I am wrong. Positions: Short X ES Sept (1197.25) Short X ES Sept 1215 straddles Short X ES Sept 1210 puts Will cover half of ES Sept short at 1185.25, and half at 1180.25. Will cover short 1215 calls at 1180. Will pray for mercy (I know what is like to be in a Category 2--never been so terrified as an adult in my life).