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Hugs not Drugs


S's over N's!


The tape in headlights opens for action and if feels like trader types are poised to pounce -- they're just not sure which way yet! The NDX tickled and tested the 1020 area and is finding some bids as a function of support. If you pull up a NDX 21-day chart, you'll see what they see -- this level MUST hold if Snapper wants to come out and play.

The banks stand out early (up a quick percent) and that's emboldening some bulls to edge into the mix. I see the importance of S&P 860/NDX 1020 and IF you're sportin' Hoofs, you can use those levels as defacto stops. Me? I made partial put sales in some names (that are lower) and rolled some in-the-money puts back down (dollar neutral) in others. What do I mean? Take a look.

I nibbled on 500 Goldman Sachs (GS:NYSE) May 75 puts into Monday's opening spike. Tuesday, as the stock slipped into the bell, I sold 250 of them (discipline) and carried the other 250 into today. This morning, as I was walking through my exposure, I decided to sell the 250 May 75s for 4.40 and buy 500 May 70s for 2.20. I did this trade for "even money," (it didn't cost me anything) and picked up some "optionality." Now, if I choose to play the gamma goblin, I have a better vehicle. Follow?

A quick check of the tea leaves shows firm breadth (3:2 NYSE, even NAZZ), a flat dollar, slippy bonds (watch those), soft semicaps (it's early) and, perhaps most importantly, a fugly biotech sector. This group has acted as a decent "leading indicator" for the Nazz and it's certainly worth a mention. In fact, pharma is softer across the board today -- specialty, drugs, bios -- and that stands out to me.

I'm sitting tight with my one leg in the fur and I understand that I may have an opportunity to make higher sales. That's my game plan/strategy for now as I attempt to use price to my trading advantage. I've gotta jump, my friends...fare ye well.

And Fokker -- get off the babysitter!

position in gs

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

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