Traders Still Want In

Was all of Monday just options expiration shenanigans? I am beginning to wonder whether we didn't shoehorn a reason or reasons into Monday's selloff and it was just pure profit-taking.

I say that because when you consider the pretty horrid unemployment claims -- if you are expecting some sort of rebound of the most important stat out there -- as well as media's hysteria about how "bad" retail is, you would conclude that we should be down today. We aren't. I believe that people are recognizing that Monday's decline was artificial and got a lot of people to put on shorts -- typically through near-term options that expire tomorrow -- that are now providing the trampoline we are playing on right now.

The puts bought, plus the desire to get in, by the mutual funds, which still exceeds the desire and firepower to knock down by the hedge funds, are producing this pretty benign if not downright positive action.

Often on days like today, I wonder if anyone who is inclined to be negative has a reason for this kind of behavior. When I was short a market like this, I would often just cover and go with the flow, respecting the market's judgment, however temporary, and accepting that my thesis or theses just don't matter right now.

Often people would regard such thinking as not rigorous. However, in the end, I was a survivalist. That's what I really cared about. Staying in the game to be able to play again. Maybe that, and nothing else, is propelling the market here.

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Know What You Own: In Thursday's trading, the most active stocks included Citigroup (C - commentary - Trade Now), Bank of America (BAC - commentary - Trade Now), SPDR Depositary Receipts (SPY - commentary - Trade Now), AIG (AIG - commentary - Trade Now), Freddie Mac (FRE - commentary - Trade Now), the PowerShares QQQ (QQQQ - commentary - Trade Now) and the Financial Select SPDR (XLF - commentary - Trade Now).

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