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Gorilla Monsoon

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The green swells are swollen as the buyers continue to take stock had over fist-and the orders we're seeing are call buyers, put sellers and sushi. Historically, option flow skewed heavily to one side is typically viewed as a contrary signal (although it can perpetuate itself first). In other words, if everyone and their sister are buying calls, it's a flag that'll probably fly at half mast before it's all said and done. Am I a bitter critter? Maybe...I'll tell ya in five hours ;-)

The S&P 925 level is in jeopardy and traders are gunning for the stop levels that inevitably rest behind it. One would think that it's only a matter of time before the line folds as the bears have already blinked once in the Nazz. It's a vicious game of financial chicken-that's for sure-and it's certainly not for the meek. Keep your wits about you.

For those that were watching the long side strategy discussed in this morning's first post, the natural extension of that trade would be to "roll" the stop up to the next level. In other words, if you bought the NDX at or around the breakout level (low tick was 1180), you could roll your stop to, say, 1100 and lock in a gain. This way, you keep your upside while defining your risk and locking in a gain. That's good stuff.

My coverage is telling me that they're seeing some panicky type orders coming into the room and I suppose that's too be expected. If you're feeling the performance anxiety, imagine how you'd feel with a few zeros tacked onto your P&L and anxious investors to answer to? It's a nutty phenomenon, but I suppose you can't fault the player-it's all a function of the game. Again, before you assume risk, identify the time frame with which you're operating.

I'm itching to put an arm into my costume as a function of the buyside capitulation as I've been eyeing NDX 1130 and BKX 800 as short-term targets. It's always been my style to swim like a salmon and, as today's SushiThursday in Minyanville, the arm is now in the costume. This makes 75% conviction, cookie....and it's an aggressive stance (not for everyone).

Hope this finds you well.
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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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