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Sniffage

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Rally attempt?

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The bell rings, the ticks flicker and Hump Day in Minyanville has officially begun. Despite the various inputs and whippy crosscurrents, the opening was relatively muted (as far as openings go). It feels as if both sides of the band camp are waiting for a direction to emerge before making today's bets.

Traders are using yesterday's highs (for the averages and individual names) as short side stops so understand that IF we get above there, we could see some poppage. Until we do, however, the pushing and shoving continues to spin the market's wheels in the snow. That's just wonderful if you're long front month volatility! ;-)

I have 5-day gips (charts) up today I've drawn a couple of trendlines from yesterday's opening. These charts also allow me to clearly monitor the gaps in the indices created by yesterday's "up" opening. Remember to watch your levels as a backdrop when crafting today's trading thesis.

A check of the morning breadth shows losers trumping winners 3:2 in the NYSE and 4:3 in the Nazz. It's super early and, after the recent liftage, a downside probe makes sense. I continue to key off the BKX (down a quick 4) as my "health" indicator and the SOX (flat on the heels of Morgan's upgrade). The pure trader in me thinks that if there's a "big" call out there and the group doesn't react, it warrants a raised eyebrow.

In macro land, the dollar is marginally weaker, gold is a snippet higher (after getting spanked for 10%), crude a tad softer and Europe continues to come under pressure. The retailers are holding steady, specialty pharma has a bid, and Fokker--I kid you not--has a picture of Ashley and Mary-Kate Olsen on his desk. The Olsen twins?

So you know, I was toying with the idea of rolling my 200 S&P February 830 puts into 100 of the S&P February 840 puts for even money. IF I were to do this (I haven't), I would have picked up ten points in strike but given up half my size. I decided to keep my "punt" and see how the market acts after the rally attempt we're about to see.

I'll be back.

No positions in stocks mentioned.

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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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