With S&P 1085 looking like it might at this time (50 minutes to go) I have taken profits on all puts, and rolled the exposure into short TNA ETF (3x small cap) - which is actually a less levered hedge.  Willing to take some losses on that instrument if the market goes up to get some insurance, but with the bounce off 1078 the bulls look to have held their level.  Further, the urgent buyer who appears almost every overnight session to push futures up can make a lot of gains on the short side disappear overnight.  That said each time we run into a support or resistance we weaken it, and we continue to pound against 1085.  I continue to believe it breaks for good, but we just don't know if there is an oversold bounce first.

Either way, technically I want to be short on (i) a close below 1085 or (ii) after some moderate bounce in the indexe i.e. closer to 1100 as we were afforded this morning.  4-5 points over 1085 is not an attractive place to be aggressively short, so we'll dial things down pending the action into the close.  I will reacquire some puts on a decent sized oversold bounce, or a breakdown below 1085 on a close... which of course could happen in the next 45 minutes.  Watching and waiting for now.

Amazon (AMZN) and Microsoft (MSFT) will be the 2 big names reporting earnings tonight.

No positions