Options Trading

Today Economics: jobless claims, prior 402K, sighting a below readings.

Trade of the day Short Ratio Put Spread spread on AMGN
Buy the Dec 60 Put  and sell twice the 55 Dec put.
In order to profit from this trade, we need the stock to declinea bit, see [VIDEO see below].

VIX Dec future trades the same as the VIX index 28.83.
Trades are looking at the 200 and 50 days moving average on the S&P consolidating to a narrow range with a shrinking volume.
Big trades on the 24 25 put's on Dec and Jan indication that the volatility may stay above these numbers and markets will continue to be volatile.
Furthermore, noted that big trades where on the Dec 30 35 out of the money bull spread on the VIX also a possibility of institutions trying to protect their long position in the stock market.
To those who do not understand the VIX mechanism on uncertain and or declining markets the VIX will rise. probably more significantly than any other instrument.

Some central banks in Europe started weighing contingency plans to prepare for possibility that countries leave the EZ by considering their currencies first time since the euros went into circulation in January 2002. Brussels summit may bring some hope for a solution to the two-year financial crisis and current doubts over countries' abilities to pay their debts.
Eurobonds: Germany 10 bond yields increasing, it shows using basic arithmetic that these bonds, sometimes. labeled ‘stability bonds,’, may actually be more likely to harm Eurozone stability.

Todays events: ISM non-manufacturing survey for August.
Last trading session clearly showed that we are still in a middle of turmoil, on Friday, we so that  there have been a lot of people waiting for the sign to hit the exits. Technically, on weekly charts we are, however, on  a strong downtrend, else proved otherwise we will face a continuation.  VIX cash gained $2.1 to $33.92, VIX futures still  implying a volatile market, waiting for the September expiration. 
The "UpDown" signals are an outcome of calculated calls and puts implied volatility.  Positive numbers yielded from higher calls IV, means  traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Todays events:Unemployment Rate.
ISM expectations for a 48.5, the actual data showed up at 50.6. This sigh of relief manufacturing is not in a recession, by the end of the day the stock market declined in anticipation for today's Unemployment Rate.
Today sensational yet explicitly requested, US Is going to Sue the banks that were involved in the sub prime Mortgages.  VIX cash gained $0.2 to $31.82, VIX futures still  implying a volatile market, but we are starting to see a change it will most likely will come after September expiration. 
The "UpDown" signals are an outcome of calculated calls and puts implied volatility.  Positive numbers yielded from higher calls IV, means  traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Todays events:ADP national employment report, Chicago PMI, Factory orders.

FOMC minutes suggest that further action at September 20-21 meeting
discussed a new form of QE3 easing, ranging from asset purchases, increasing the average maturity of the Fed’s portfolio.
Consumer Confidence - S&P downgrade drove down consumer confidence that fell  14.7 points in August to 44.5.  VIX cash gaiend $0.61 to $32.89, VIX futures still  implying a volatile market, but we are starting to see a change in the curve and gradually getting its original slope.  
The "UpDown" signals are an outcome of calculated calls and puts implied volatility.  Positive numbers yielded from higher calls IV, means  traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Todays events: Case-Shiller 20-city Index, Consumer Confidence ..

Yesterday markets performed a huge move on a slender volume, probably, leaving major traders on the bench.   The S&P rallied 2.8%, and the Nasdaq was up by 3.3%. It may be that bulls are anxious to get long on sporadic publications of  U.S. Stocks are, "Massively Undervalued"  and "Gold Gets Bubbly."  One more reason could be that all the world’s central banks are now providing easy money putting the rising inflation worries aside. VIX cash continued to drop this time by  $3.31 to $32.28, VIX futures still  implying a volatile market, but we are starting to see a change in the curve and gradually getting its original slope.  
The "UpDown" signals are an outcome of calculated calls and puts implied volatility.  Positive numbers yielded from higher calls IV, means  traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

These week events: EU news stream and the US jobs report..

GDP - Second Estimate came out 1% less than expected 1.1%.
VIX cash dropped $4.17 to $35.59, VIX futures still  implying a volatile market but this week could be a change, and we will see the curve get its original slope.  
The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers yielded from higher calls IV, means  traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Today's events : Fed Chairman Bernanke speech at the Fed's annual Jackson Hole..QE3!?

Economic event : GDP - Second Estimate will be published at 8:30, prior 1.3%, expected 1.1%.
Yesterday continuing claims 3641K, came out better than expected.  VIX cash rallied $2.86 to 39.76, VIX futures still  implying a volatile market.   
The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers yielded from higher calls IV, means  traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Today's events : Initial Claims, Continuing Claims ...  
Economic event : Initial Claims  will be published at 8:30, prior 408K, expected 400K. Continuing Claims will also be published at 8:30 prior 3702K, expected 3700K. Yesterday's Durable Orders came up much more than expected sending the markets to another positive day.    VIX cash down by $0.37 to 35.9, VIX futures still  implying a volatile market although the front month dropped well below 40$ level.   The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers yielded from higher calls IV, means  traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Today's events : Durable Orders, Japans dept downgraged by moody's ... 
Moody's Investors Service's downgraded Japan's sovereign debt rating,  Nikkei 225 is down 93 points.   In the annual gathering this Friday, Markets Will Look for a hint on more stimulus in Mr. Bernanke's speech.  Economic event : Durable Orders For July will be published at 8:30 AM , Prior  -1.9% , Market Expects 1.9%.    VIX cash significantly down by $6.17 to 36.27, VIX futures still  implying a volatile market this time was to the upside.   The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers higher calls IV traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Today's main event :Standard & Poor's president Deven Sharma resigns... 
Standard & Poor's president Deven Sharma steps down followed by the credit rating agency's decision to historically downgrade US debtis.
Economic event : New Home Sales For July will be published at 10:00 AM , Prior - 312K , Market Expects 300K.  This event will take second roll today.   VIX cash did not move much, down by $0.61 to 42.44, VIX futures still  implying a volatile market this time it looks like to the upside.   The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers higher calls IV traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Today  on the board: QE3 ... 
Record-low yields on U.S. Treasuries shows that institutions already priced the third quantitative ease .     VIX cash didn't move as much, up $0.38 to $43.05, maybe waiting for the Federal Reserve Chairman Ben S. Bernanke statement.  VIX futures still  implying a volatile market.   The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers higher calls IV traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Yesrday's economic event : CPI,   Core CPI... 
Higher than expected CPI, meams, higher inflation to already slowing economy, ten year US bonds yielding historically record low 2.06%, we cant see it other than  realy bad news.  Even low price to ernings average ratio wouldn't help due to a deteriorating business enviroment.   VIX cash rallied a $11.09 to $42.67 chalenging its last pick and most likely to break the ceiling.  VIX futures still trades abnormally, still implying higher volatility.   The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers higher calls IV traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Today's economic event :CPI, Core CPI...

Higher than expecte PPI and Core PPI, markets ends par value.
VIX cash droped $1.27 to $31.58.  VIX futures still trades abnormally, still implying higher volatility. We are facing an unprecendented situation, literally, all advanced economies are in a significant fiscal deterioration, to follow by S&P US downgrade and upcoming mortgages rating downgrad.
We can surely say that the restless and volatile trading sesions are not over.  The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers higher calls IV traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Today's economic event :PPI, Core PPI...

VIX cash gained $0.98 to $32.85.  VIX futures still trades abnormally of it's "NORMAL" term structure, still implying higher volatility. Combining global market probability is more than 50% to the downside.
Our vision is, side ways to down market for the next 6 mo.
The "UpDown" signals are an outcome of calculated calls and puts implied volatility.Positive numbers higher calls IV traders believe that the stock will rise and are willing to pay more for the calls, the opposite goes for the puts.

Sentiment

Stocks are broadly higher after upbeat by the National Bureau of Economic Research that said on Monday "the recession that has began in December 2007 officially ended in June 2009".
The retail sector shows stronger-than-expected sales a push up for Q3 GDP and gains in the wholesale Inventories and net exports also drives Q3 GDP Higher.
Housing Starts - market expectations are slightly better in July.

Using the VIX as an indicator
What is the VIX? The VIX or Option Volatility Index is a measure introduced by the Chicago board of options exchange (CBOE), it is an index that measures how volatile the market is expected to be in the next 30 days!...Read more