Morning Update

Market is all over the place at the moment after gapping down big, it has bounced a bit off the 1050 level on the ES. Internals are still fairly weak. Cumulative ticks were down right off the bat and now are back up positive and kind of oscillating indicating it's probably going to be a mixed day. Apparently the "locals" (floor traders) were short in the S&P futures pit and were forced to cover as "paper" (brokers acting for clients) started to buy - (You can listen to this audio feed from Trader's Audio or as a free service from the market cast chat room in TOS delivered by the always great Ben Lichtenstein).

As for my trades, I exited GOOG today for $1.57. Reasons were that I didn't like the big volatility today and the fact that GOOG has bounced nicely off 459. Also and more importantly it doesn't take much for a $460 stock to move $10 in a day. Current implied volatility levels give an expected move (1std deviation) of $9. Therefore you want to take profits when you can especially when most of the money made in the trade was due to falling implied volatility levels after earnings. As for the GS trade, that is working out nicely as the stock has recovered from the early weakness. Therefore I'm likely just to hold onto this and see how it works out.

At this point in time, I feel like it's prudent to trade smaller as the market seems a bit uncertain here and we could be in for some more volatility. Only trades I like here are longer term high prob iron condors 55 plus days out where I can get very wide break evens.