It is back. The uncertain untamed & market is back, for how long? I have no idea. But while it is here it is imperative for professional traders to take advantage of the "loose" market. When i say take advantage i mean make as much coin as possible while the market permits. Sometimes you only get 1 or 2 days a month of good trading, the rest you must sit on your hands for fear of being chopped to death. I can relate.
Chart is of the VIX, intra day April 30.

The past two weeks we have had Financial's, specifically Goldman in play. Goldman has pending civil charges as well as a criminal probe, this is never good for a stock but is always good for a trader. Not good for a buy and hold long investor, but anyone buying Goldman up here probably doesn't quite know what they are doing and might need a lesson in over bought/oversold and tape reading. I guess this is where i come in, but that is another post. The focus of this post is being ready for anything and being in your seat and able to trade with bullets ready to fire at a moments notice.

*I am liking what i am reading...This is very preliminary but i do believe a story like this needs time to develop.

You might be asking yourself this exact question, but are afraid to shout it out... I believe the tides could be turning for the Financial's, NOT necessarily the entire market. The tone of the our elected officials while grilling Goldman execs hinted at aggravation and intolerance, even the simplest answers from the execs were met with doubt and criticism, this story does not end well. This exact scenario played out in the final months of 2008 (you all know how that ended), *REMEMBER where there is smoke there is fire.
 

As everyone should already know, Goldman was charged last Friday with fraud charges relating to sub prime mortgages. I think most people who are familiar with Goldman and their antics were expecting something like this to happen. I for one am not surprised and fully expect other banks to find themselves in a similar situation because everyone on the street played follow the leader. Goldman was the leader and was the smartest guy in the room....

Shares of Intercontinental Exchange and CME Group are surging in early afternoon trading on rumors CDO trading will be cleared on their exchanges.  ICE (NYSE: ICE) is currently up 5 points on slightly higher than average volume, CME (NYSE: CME) is up 18 points on similar average volume.

Options are active as speculators come in buying up OTM calls on both ICE and CME. In ICE the 120 May calls saw 2500 traded vs OI of 644. In CME traders focused on the 350 calls as 1500 traded vs open interest of 909.

ICE 52 week range 81.26 - 121.93
CME 52 week range 218.56 - 353.03

Shares of Netflix (NASDAQ: NFLX) are charging higher as it reported positive first quarter results along with a positive forward outlook. Shares rose to an all time high of $102.49 on 8 million shares vs. 1.8 mil average.

Netflix options activity confirms the move, as the May 100 calls saw increased activity as 3k traded vs an open interest of 1.5k. Further out of the money calls also saw increased buying specifically the 110 calls, this prices in a 8 point move before May 21st expiration. June and July calls are also active.

52 week range 36.25 - 102.49

You might think, oh man this stock is so cheap it can only go up! If you think that you are wrong, you will be crushed. Case and point ABK's trading this week, the junk was up over 100% Tuesday. Yesterday she was up another 50% by late morning. I decided to take a shot with her and dance in the 2.50 calls. I bot them for .75c on a great fill on the bid, i sold .80 .85 and .90. I left a few on in case she went higher, she did not. ABK fell almost 65% in a matter of minutes, almost an hour it took. The options in ABK or any cheapie can move 100's of % in seconds..

The markets have complacently pushed higher despite seemingly bland economic numbers, April is shaping up to be another grind higher with declining volume the theme. SPY 120 was a number we did not think anyone would see for quite some time, though today we saw, briefly, prints above 120 before the markets retreated ahead of AA's (Alcoa) .

AA missed their sales number though narrowed their loss. The market blipped during during last earning season, only to be bought right back up after the dust settled. ie low volume = buy buy buy.

Elevator eavesdropping has been around since the first elevator ride i am sure. One cannot help but overhear what others are saying in the vator... On the morning of September 8, 2008 i overheard in a elevator the following brief conversation.....:


Guy 1: turns and says to guy 2: How is your morning/week been? 

Guy 2: Actually not to bad, i know others in worse shape. 

Guy 1:  That is good to hear, i actually feel the same way. I talked with my buddy over at Lehman and man their issues make mine look like cake.

Guy 3: Yep, have a good one.

I take this all in, i step out onto my floor. I never saw the people again. You know what happened next, Lehman filed BK September 15, 2008. After i heard this i did not think much of it, i just knew something was up because the markets were causing even the oldest and most experienced traders on my floor to get jumpy. Something was indeed up, this conversation helped instill confidence in myself that when we start going down, its not going to stop, it did not till 666.

This afternoon if you were watching CNBC you heard one of the guests say he believe selling puts on Wells Fargo (NYSE: WFC) and other financials such as Citi is a prudent way to play the upside in this current market. I might say something like that after a few highballs, though i doubt the guest was tipsy.


My guess is he wants to get into puts on the financials at a lower price, this is possible if there is a over supply of sellers across the board.

Coming off the holiday weekend the market has performed well, much as expected. The march towards 11,000 on the DOW appears intact, the momentum wave is carrying us in my opinion. The catalyst this morning was of course Apple, which released the IPAD on Friday, also a new price target of 300 has been set by Canaccord .