We have a busy week of trading ahead of us. Tuesday brings on the Fed’s economic advisory speech at 14:15 EST. Most analysts expect a 25bp cut in the Federal Funds rate. I think the market’s already priced a 25 point cut into prices but we’ll see.

We have options expiration week this week as well. From the first couple of months I’ve been investing, I’ve noticed volatility is huge during options week. I think my strategy for options week will be to stay out of options week! I’d prefer to invest in something a bit more stable so if I do play on buying into new positions, expect those positions to be small, almost exploratory purchases.

Financials report earnings this week with Lehman reporting Tuesday. It’s been said that depending on how LEH does, it would be wise to invest in either Morgan Stanley (MS) or Goldman Sachs (GS) as both have less subprime exposure than LEH. MS reports Wednesday while GS reports Thursday. I may pick up one or the other if LEH’s earnings are favorable and it has enough of a pop after the report.

Hunker down this week. It’s going to be a rough ride!