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The Gap Yap


He is not an animal--HE IS A FOKKER!


You were the girl that changed my world
You were the girl for me
You lit the fuse, I stand accused
You were the first for me

(The Gap Band)

Alright, Fokker, you win and I promise not to make any more Mask references. It's just SO easy to tool on you, and your pops gave me the green light when I saw him at Minyanfest. Maybe we should get YOU an assistant -- perhaps a carnie -- and this way you can let the schvitz roll down hill!

The early afternoon grind higher continues, and I want to bring up a few points. First and foremost, mind the gaps created by yesterday's opening in the S&P and NDX. These types of vacuums have a habit of "filling" over the course of time and we're tickling the lower band tag. Also, please be aware that a (European?) account has steadily bought the S&Ps all morning and has accumulated more than 4,000 . In case you're wondering, that's a LOT of futures.

The tea leaves are hanging tough today -- the breadth is strong, the dollar is fighting back and the bulls are once again beating their chests. I covered the meat of my exposure yesterday for fear of this type of reaction but, truth be told, I'm having a hard time subscribing to the upside. Maybe it's the meltage in the VIX (no fear) or the alleviation of the near-term oversold condition (from yesterday). I'm not sure, but I'm doing a bit less and taking my time.

When I reference my "underneaths," by the way, I'm talking about the (small) smattering out-of-the-money puts I own. For instance, if XYZ is trading at 36, I may choose to buy May 35 puts for a bone. If the XYZ rips higher, I'll only lose my premium and if it turns lower, my delta kicks in and I'll become short the underlying stock. That strategy achieves three things: It defines my risk, it takes advantage of the VIX meltage and it allows me to "spec" on the direction without putting too much cash on the line.

That's about it, my friends. I wish I could "sign off" on the "melt-up" thesis but I don't feel it. That doesn't mean it can't happen -- I've surely been wrong before -- but this is a forum for honest communication and you'll always get it from my gut. I respect the market and the powers that be and I'm not blindly fighting or stubbornly trading. I'm simply exercising patience and reminding myself that opportunities are made up easier than losses.

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

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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