Derivatives

Markets showed some strength today, although not nearly as much as some were expecting. The Dow hit an intraday high of 12,326 (up 100+ points) but each intraday rally was consistently met with selling pressure. The conventional wisdom is that this was largely end-of-the-quarter “window dressing” by the institutions. Kind of an ugly window, no matter which curtains you put up: the major indexes are still all off 9% or more YTD.
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Original Source: www.condoroptions.com

Last week, the market closed with a whimper. The NASDAQ composite will finish 15% lower for the quarter and the S&P 500 will close 10% lower for the quarter. This is our weakest showing in 5 years. End of month fund buying is supporting prices today. Once that dries up, the market is likely to drift lower. Asian markets traded lower, led by China which was down 3% overnight. That market staged a parabolic three-year rally and now it has quietly lost 30% of its value from those highs. Japan was down another 2% last night at it has lost 35% …
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Original Source: feeds.feedburner.com/oneOptionBlog

DJIA:         12,262.89  +46.49  +0.38%  
S&P 500:   1,322.70  +7.48  +0.57%  
NASDAQ:  2,279.10  +17.92  +0.79%
Today was the last day of the quarter, but I think most of the positioning was done Friday. Tomorrow is a new start and with the Paulson speech out of the way, I think we continue our little upward movement in the market. All in all, a very quiet day all around. Option- wise, nothing jumped out at me as being suspect or unusual . Hopefully tomorrow is a more interesting day….
Original Source: feeds.feedburner.com/OptionsTradingTheSmartWay

81 more SIGM Oct. 12.5 calls trade today vs. a combined total of Zero in all other Oct. ITM’s and all May and July ITM’s. Smart money fronting the next double down.Yes, it’s t…
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Mon: Chicago PMITue: Construction Spending, ISM IndexWed: ADP Employment, Fed Chairman Ben to testify about economic outlookNotable earnings: BBY, MON, KMX, RIMMThurs: ISM Service, Bear Stearns Hearing by SenateFri: Non-farm payroll, Unemployment, Fed Governor Kroszner to speak about global economic & financial challengesNotable earnings: MOS, FDO…
Original Source: simplyoptionstrading.blogspot.com

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Original Source: tradelikemike.com

Kevin Depew is out of the Minyanville pocket today, but when last he posted, he had some interesting signs of strength under the surface.Just to review, he tracks the percent of stocks in a given index that are above their 50 Day MA, and pops them into a PnF chart….
Original Source: bp1.blogger.com

More than any other stock at the moment, Lehman Brothers (LEH) is the poster child for investor anxiety about the stability of financial institutions. The stock has been the subject of countless rumors, aggressive put buying, and at least one near death experience (that looks ominously like a funnel cloud on the chart below) when the stock plunged to 20.25 on March 17th….
Original Source: feeds.feedburner.com/VixAndMore

Just got Guitar Hero, finally see what the fuss is about. Completely addicting. My hand eye coordination apparently still playing Techmo Bowl or something, it took half a day and 20 tries and lots of Social Distortion and Pat Nebetar….. I mean Benetar……..to get to our first “gig”.Anyway, as I mentioned last week, Andrew Horowitz interviewed me for one of his podcasts. You can find it h…
Original Source: adamsoptions.blogspot.com

In reaction to strong earnings/guidance:
SVA +31.1%, CALM +8.4%, CDS +7.9%
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Original Source: feeds.feedburner.com/OptionsTradingTheSmartWay

Goldman Sachs notes the ENHANCE data were presented this weekend and were not surprising. The big surprise was the professional commentary, which spoke to limiting the use of the drug (until after other cholesterol-lowering medicines have failed) unless it is proved in an outcomes trial (expected to complete in 2012). Given the uncertainty around the franchise, the firm is downgrading Schering-Plough stock to Neutral. SGP shares are down 32.4% since being added to the Americas Buy List on November 26, 2007, while the S&P 500 has fallen 6.5% over the same period. Over the last 12 months SGP shares are down 22.1%, while the S&P 500 is down 7.2%….
Original Source: notablecalls.blogspot.com

Couple of firms comment on Schering-Plough (NYSE:SGP) following the ENHANCE trial results:- Deutsche Bank is lowering their tgt to $21.50 from $25.50 saying the ack of new insight from theENHANCE results was no surprise, but the tone of the panel “discussion”, NEJM commentary and ensuing media coverage was more negative than anticipated. Additional trauma for the JV franchise, with immediate volatility in Rx demand and declines in market share is the likely near term outcome in firm’s view….
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So let’s say you see some OTM puts going banana’s. Big volatility lift, and of course big volume associated with it. Contrarian indicator (too much fear) on not (smart money). …
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(Click SU, SPY, CLF for each trade detail)

This is my monthly analysis for March 2008 trades. As per the table above you can see that I only have 3 trades for this month. Apart from the mistakes…

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Original Source: feeds.feedburner.com/OptionsTradingDaybook?i=T0BA1FG” border=”0″>…

With the launch of the subscriber newsletter, I am in the process of making decisions about what content is directed toward the blog and what content is reserved for the newsletter. I suspect that blog readers should see very little in the way of changes, though I have dropped the weekly update to the Portfolio A1, which did not seem to be generating a great deal of interest.I also used to do a weekly VIX and V…
Original Source: feeds.feedburner.com/VixAndMore

Thanks to all who have elected to become charter subscribers to the VIX and More Subscriber Newsletter, the initial issue of which was mailed out earlier today.Anyone interested in receiving this newsletter can subscribe here. Future issues will be published every Sunday and Wednesday.…
Original Source: feeds.feedburner.com/VixAndMore

Well thought out argument by Phil here in the comments.The uptick rule was simply designed to stop panic selling as the rule is, very simply, that you can only short a trade when the last trade is priced higher than the previous one (hence, the UPtick)….
Original Source: bp2.blogger.com

The same hedgie contact that so brilliantly called the last down leg in financials (see March 24 post) pinged me again on Friday. This time he had this to say:This is probably going to challenge alot of the academic folks… but lets face it.. at least in the short term… psychology is 80% of the market volatility.First off, I refuse to sell any of my shorts… namely SKF, SRS, TWM… But unlike the past 6 months or so I am starting to put more cash to work AGAINST my shorts. Prior to last week I was mostly 40% - 50% cash at most times….
Original Source: notablecalls.blogspot.com

The Down Jones ($DJI) remains range bound still as we finish off the end of the first quarter on Monday.  It appears to be destined to stay within a few hundred points of 12,000 and 12,500.  A longer-term down trending line helped to keep it within this range as the DJIA tried to angle up on Monday.
The DJIA has been above its 10 day moving average for more than a week until Friday when that finally broke.  Luckily the 20 day was just below that point to offer support.  If the 20 day continues to provide support, the 10 day will be able to have a fighting chance to come back into play.  The longer the DJIA stays below the 10 day, the worse it is in the near term.
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Original Source: feeds.feedburner.com/MyTradersJournal

I don’t normally like to post articles that are as lengthy as this one here, but when the quality is there I will make an exception. There are a few sports references and examples (which might not interest all of you), but overall I thought this was a great article. If you have the time run through this and give it some thought.What It Takes to Be Great Fortune on CNNMoney.comB…
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