If I'm gonna play today, I've gotta make a stand in here!
Hello darkness my old friend
I've come to talk with you again
Because a vision softly creeping
Left its seeds while I was sleeping
(Simon and Garfunkel)
Alright Minyans, it's getting close to fish or cut bait time. S&P 860 has waffled under the syrupy sell side pressure and S&P 853 is now the level du jour. Thus far, despite the red seas, the market has traded relatively orderly and traders far and near are scared schvitzless of a Snapper. Is that self-fulfilling or the ultimate bearish flag?
The early tea leaves are (obviously) pointing lower. Crude is higher, the dollar is lower, the financials and semis are sloppy, the breadth is 2:1 negative and the action is lethargic. With that said, please pay VERY close attention to these S&P levels --they're important. If the bulls are gonna make a stand, it's gonna be in here. If they can't hold these levels, it could get fugly.
For my part, I've made small, disciplined sales on some of my May puts, but I've left enough on to justify keeping that leg in the bear costume (25% conviction on the short side). A bounce attempt wouldn't shock me but I remain wary of the downside. Hey -- just one trader's (humble) opinion.
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 email@example.com.
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