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Numb? Nuts!

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If the tape rallies, the semis should lead. If it fails, the banks will lead. dry, heavy....got it?

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Come on, now,
I hear you're feeling down.
Well I can ease your pain
Get you on your feet again.


(Pink Floyd)


Today's Minx is saucy, Béarnaise, and traders I speak with continue to pull their (remaining) hair out. This is your friendly Minyanville reminder to SHAKE IT OFF! Stand up, stretch, splash some water on your face, pet your goldfish--do whatever it takes to clear the mechanism and focus your energies. We've got some important decisions to make and I need you to be tip top, schnitz hot and second to none (sir) as we find our way.

The S&P is probing the 840 and the negative gamma crowd has to be a bit concerned. All of those dealers (who are short puts to customers) scrambled to "buy in" their hedge as the market raced to S&P 850. As we reverse lower, their short puts increase in delta (follow?) and they get longer as the tape goes lower. This, in a nutshell, is what we mean when we discuss negative gamma (and how expiration exacerbates volatility).
Looking across my (8) screens, I've noticed that the intraday stochastics are coiling again (as they did yesterday) and I want to see what kind of upside jig the Minx can dance if they start to uncoil. Talking to my contacts, it's clear that many fear Snapper and, as such, they're not pressing any downside bets (bearish). Conversely, I'm hearing that the Q&A on Merrill's Semiconductor (upgrade) conference call is being dominated by bearish hedgies (bullish). Does anybody else feel like a juggling clown here?

The financials continue to act lethargic and I'm still keying off of Citigroup as my main tell (34 is upside resistance). The breadth has also taken a (marginal) turn for the worse and, as that's been THE tell, we must monitor it. Factor in the dollar weakness (watch this), the gold firmness and the Semi semi-flatness and, well, I'm stickin' with my current posture for the time being.

Daddy's nemesis these days is my front month paper (S&P February 830 puts) and while I started my "leg" yesterday and bought some March paper, I've got precisely four hours and forty-five minutes to decide what I am gonna do with these bad boys. Yes, there's always the overnight session (S&P options are "cash settled" on the opening print) but, for all intents and purposes (happy now?), I've gotta schvitz or get off the pot by today's close.

Meanwhile, we're gonna have details of our charity auction soon and I'm excited about the initial feedback. If nothing else, Minyanville is working towards raising philanthropic awareness and we've taken strides towards bettering the lives of children. At the end of the day, these are the accomplishments I'm most proud of and I'd like to that you guys for making them a reality.

I 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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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