Thursday, July 31, 2008

Opening Gaps

As you all know if not for Biotech today, NASDAQ Composite would be down with other major indexes. Just now I scrolled through some of biotech names trading higher on "who is next M&A" speculations. Most of them just opened higher...

Gaps during the the week, especially "mass gaps" never hold, that is why today I bought puts on some of over extended biotech names. Also, in spite of (XLF) most likely being stuck in the range for some future (?) since I am an action junkie I bought (XLF) puts and some (QQQQ) puts.

"The theory of gaps" ( in my interpretation :) teachs that we may put more trust into gaps on Mondays or after holidays when traders have some extra time to logically evaluate events.

So..I am "slightly" short as of now ( I have multiple long calls positions in individual stocks )