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Jack Knife!

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Have a peaceful night!

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She cuts you hard, she cuts you deep,
She's got so much skill
She's so fascinating that you're still there waiting
When she comes back for the kill

(Billy Joel)

Wow. What else can you say when the Minx head fakes through resistance (S&P 1045) and then, after the traders jump on board, the bottom falls out. I guess when Scotto refers to an "impulsive" sell-off this is kinda what he had in mind. Brutal, fast and without warning.

A few quick thoughts before the toothpicks holding my eyes open snap in half. The equity put/call ratio actually fell today (from .77 to .64) and that's somewhat surprising (if not scary). The index put/call rose from a marginally bearish 1.13 to a moderate 1.48. All in all, complacency remains baked in the cake.

Why was the downside reversal so violent? The stories I'm picking up are negative gamma pull (in front of expiration), mutual fund dumping (can't confirm) and the weight of the macro crosscurrents. I can tell you with certainty, however, that no pre-expiration "looks" were given on the floor as some have mistakenly reported. My cue, for those following at home, was the reversal in the SOX. When that flipped, the tape tripped.

Now what? Technically, S&P 1035 failed to hold on the close and the next support levels, in order, are 1020, 1000 (psychological) and 960. On the Nazz, the NDX held 1360 (thus far) and, if breached, 1345 (marginal), 1300 and 1220. It is noteworthy, however, that the piggies are still above their 50-day at BKX 920. The upside levels (just to stay openminded)? We can use the series of lower highs in each of the major indices.

I'm gonna mosey along so lemme take this time to wish you all a good night. I would like to ask the Dallas Minyans to give me a ping, if they would, as I have a question before my Texas two-step. Thanks a lot and I'll see ya'll in the ayem.

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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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