Last week Google announced their earnings into the swirl of negative news and hype surrounding Japan, Sell in May and go away, buy the rumor and sell the news, recent S&P comments about US ratings, and a general skittishness that the rally may be topping. What better time to take a chunk out of a well known market leader, and allow the funds to establish large options positions at a lower decelerating delta to the downside. Conversely the rebound from these levels after one more shake out of the weak, should be 15 to 20 points or 3% by May expiration.
I expect a run to 550 given the call activity at the bid for the May contract, and am positioning myself to benefit from such a move on any price action under 525.
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