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Monday Morning Lefthander

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With expiration in the rear-view, alotta bears spent the weekend sitting shiva for April paper.

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Good morning and welcome back to the sweepy shack. It was a heckuva weekend in the northeast, with temperatures unseasonably warm and the Yankees uncharacteristically cold. Yeah, with a blue hat in my hand, I gotta give snaps to the Sox for the Fenway sweep. Pitching wins championships and all-stars, while torrid and tony, are no match for team chemistry. The saving grace is that it's April, with plenty of time for the rotation to heal or to acquire some horses for the home stretch.

The reality check on the baseball diamond pales in comparison to those with ursine inclinations. With expiration in the rear-view, alotta bears spent the weekend sitting shiva for April paper. I'll raise my hand on that one as my attempt to leg out of my S&P puts (read: sell my front month paper into a crimson dip to buy out-month puts into a rally) was penny foolish and pound painful. I traded around those puppies to the best of my ability but, ashes to ashes and dust to dust, they're in the ground.

With the meat of my de facto protection gone, I made a slew of sales on my long bets to avoid the dreaded double whammy (and allow for the possibility of a snazzy, if not completely intentional, unwind of my bet). That's left me relatively light and tight as we power off for a fresh five sessions. I'm gonna put it out there, as always, but please understand that I'll likely keep large positions off my sheets as I'll be out next week tending to some family matters. I learned a long time ago that when you feel you absolutely can't take a break is typically when you need it most.

In other news…

  • The dollar, which is off 32% since 2002 (masking the "absolute" returns on a global basis), has helped alotta multi-national earnings this reporting season. In a tape with psychological tail winds, as we seemingly have now, folks pay little attention to the composition of earnings (cost cutting, currency gains). If and when collective sentiment shifts, you'll see a lot more scrutiny regarding how these companies are making coin.

  • Levels of Lore? TRAN 5200, SOX 492, XBD 248ish and BKX 117.25-118. For the broader tape, S&P 1530-1550 is the first discernible resistance while current support is S&P 1450 (former resistance).

  • Some Point & Figure Breakouts, as scribed by Pepe Depew on Friday's Buzz:

  • Expect an "expiration hangover" as traders square their books and take fresh looks. My sense, for what it's worth, is that the alleviation of April paper introduces more downside (rather than upside risk).

  • Finally, with regard to Minyan housekeeping, we had a server migration over the weekend so MVHQ emails may have fallen through the proverbial cracks. If you have thoughts, questions or other communications that weren't answered, please resend so we can tend to your queries. We do, as always, strive to be here for y'all.

  • Good luck Minyans-let's hit 'em hard.


R.P.

Position in SPX

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.

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