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Jerry's Kids

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There's mosquitoes on the river
Fish are rising up like birds
It's been hot for several weeks now,
Too hot to even speak now,
Did you hear what I just heard?

(Grateful Dead)

Boo just pranced into the trading room, with a smug little smile on his face, to ask if I saw the monster QQQ put buyer hit the floor with 91,000 November 21 puts to buy. I did, young bear, but before you get your chops in lather, remember that big put buyers are typically seen as bullish from the contrarian trader camp. Think about it...if this guy owns 91,000 puts, that gives him the right (but not the obligation) to short 9,100,000 QQQ's until November expiration. At a point, those puts will either be sold or the underlying instrument (QQQ) will have to be covered. Things that make you go hmm...

Meanwhile, the ISM came and without causing a significant move, and our focus has shifted back to our trading "tells." For those of you new to the column, tells are clues that are nestled in the landscape that help us craft our trading thesis. I typically monitor the internals, trading flows, technical levels, sentiment and, when applicable, individual stocks or sectors. As we grow together in this space, I trust you'll become more familiar with my method of trading. Again, this doesn't mean it will fit your individual style or risk profile, but the goal is for you to glean value from the process.

The predominant flow in the early going has been to the sell side, but the tape has thus far absorbed the supply (a good sign). Still, the internals continue to struggle (particularly in the Nazz) and the trading seems relatively listless. Also, keep an eye on those retailers...they act heavy. Remember, it's not necessary to play every move in the market, it's only necessary to have a high winning percentage on the trades you choose to make. Await your edge, and when you identify it, trade to win...never trade "not to lose."

Gotta jump...big decisions on the lunch front. Early indications were for a Sushi print, but it seems that Bucky and Junior are lobbying hard for a McDonalds print. Like Bucky needs McDonalds!

R.P

Long QQQ calls


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