I was fortunate enough to buy MRK before their Vioxx settlement announcment. I sold the MRK Dec 50 puts. Overall it was a dismal week for most longs.
A sharp down tick during the last half hour on Friday looks to me like some big players were exiting or going short. Constructive news for would be bulls was that the financial stocks found buyers on Friday, and US bonds went up in price. Bonds often telegraph a big tumble in the stock market, though of course this time history may unfold differently.
GDX (gold stocks) is diverging from GLD (gold bullion), with GDX ticking down even as GLD ticks up. This kind of divergence is a warning sign that the gold rally is getting long in the tooth. Just as TLT may lead SPY, GDX confirming new highs in GLD would be much more comforting for gold bulls.
Positions: WFR, GM, MRK, T all hedged longs
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