At this rate it will take only another four days or so to get back Friday's losses. Though I still don't believe Friday marked a low and do expect to see a test of 1240 in the works sometime in the next week to10 days.
But it should be noted that, based on Investor Intelligence's latest poll numbers, this is an increasingly popular outlook that diminishes the odds of it occurring. The numbers from II this week showed bulls dropping to 53% from 57%, bears increasing to 25% from 22.9% and those looking for a correction up to 21% from 19.5%. The spread between bulls/bears is its narrowest in over three months.
We get a different contrary indicator from yesterday's put/call ratio, which dropped to a miniscule 0.36. You shouldn't read too much into one day's reading when we have not seen one day, or even an intraday reading, climb above 1.0 and the 10-day moving average remains at an optimistic 0.54.
Earnings will once again be driving trading. Keep an eye on Checkfree (CKFR - commentary - Cramer's Take) and Netflix (NFLX - commentary - Cramer's Take). Both opened sharply higher after reporting strong earnings, and both stock's options sport high I.V stocks and the trading ahead of their earnings showed a heavy bias toward puts as investors braced for a disappointment.
Eastman Kodak (EK - commentary - Cramer's Take) has seen a call volume ramp up ahead of its Monday earnings report, and I.V. has been inching up to 40% from 35% one week ago.
P.S. Will you be there when Cramer makes his next move?
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Steven Smith Blog Comparing Option Brokers 1/24/2006 4:56 PM EST thinkorswim, optionsXpress and Trade King offer different merits for different types of traders.
Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback; click here to send him an email.To read more of Steve Smith's options ideas take a free trial to TheStreet.com Options Alerts.
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