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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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