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The Saddle Straddle

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Breakfast at Tiffanys!

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The hairy horserace continues as a combination of a benign Intel (INTC:Nasdaq) mid-quarter update, "fine" economic numbers, performance anxiety and negative gamma props up the pre-market futures. Fielding my morning calls, I haven't found anybody wanting to sell (much less short) this market and while that's understandable, I suppose, I wanted to pass along that factoid.

A few observations to chew on as we edge towards the opening. We know from our collective experiences that the news is always worst at trading bottoms and best at tradable tops. Obviously, it's much easier to see inflection points (March) with the benefit of hindsight but it's typically not as easy while wading in the emotional muck.

How parabolic can we go? Emotionally driven tapes fueled by structural exacerbation (negative gamma) is a dangerous environment. While everything in the world is pointing higher right now, remember from where we came and understand that the "bull case" isn't novel -- not with 57% bulls and 20% bears. Stay sharp, stay tight and stay true to your view. It promises to be a nutty nut today.

We discussed the blowoff scenario last week and the potential for a last gasp to S&P 1000. We're there now, and while it may very well be too "easy" a level, it's worth monitoring. The more important zone for the S's, in my view, is S&P 980 (if and when). For my part, I want to watch the opening and take my cue as a function of price.

Have an awesome day.

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