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The collective memory of U.S. investors seems to be getting shorter, at least if signs in the options market prove correct.

Sure, June was a wonderful month for tech stock investors, but its gains brought with them a notable level of complacency, despite the carnage in tech stocks less than three months ago. The growing comfort level is signaling to some that the leg down investors have experienced early this month may continue.


Chicago Board Options Exchange

volatility index, which is used by traders as a measure of anxiety in the market, has been indicating that the market is getting complacent. In addition, implied volatility on the

Nasdaq 100 unit trust

(QQQ) - Get PowerShares QQQ Trust Ser 1 Report

has dropped dramatically compared to levels from a month ago, also suggesting investors may be getting too comfortable.

Current levels on the VIX are suggesting to some traders that the market could be in for a bit of a rough patch going forward. The VIX has perked up over the last few sessions, but not a great deal, considering it had fallen recently into the low 20s. The VIX around that area displays that investors aren't particularly worried about the market, a classic warning sign to contrarian traders.

Jordan Kahn, of

Kahn Asset Management

, said he's been watching the VIX lately because it "has been getting real low." He noted that the VIX fell down to 22 a few days ago, and that it hadn't been that low since March. Usually when the VIX gets down to that level, it suggests complacency, which can often presage market weakness, Kahn said.

Not only has the VIX been in a downturn, implied volatility on the popular QQQ has tumbled a lot over the last month, Kahn noted. The hedge fund manager pointed out that implied volatility on the QQQ was around 79 a month ago and now it's about 41, showing that investors didn't seem overly concerned with the potential for another Nasdaq disaster before summer's end.

Implied volatility is the annualized measure of how much the market thinks a stock or index can potentially move and is a critical factor in an option's price.

Max Ansbacher, president of

Ansbacher Investment Management

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, who sells options on S&P 500 futures, said the drop in implied volatility "in the last month has been extraordinary." He also noted that there was record-breaking volatility earlier in the year and now volatility is getting back to normal. Ansbacher said it was his belief is that volatility isn't going to go back to where it was earlier this year.

Volume and implied volatility in


(DL) - Get China Distance Education Holdings Ltd. Report

options may have perked up Wednesday on renewed takeover chatter, but action in Dial options Thursday has been relatively muted so far.

Dial, it should be noted, has been the subject of takeover talk before.

wrote in late

March that Dial was a potential takeover candidate.

On Wednesday, the out-of-the-money July 12 1/2 calls were most popular, with 1,800 contracts changing hands, compared to open interest of 146 as of Monday's close. The last trade Wednesday on those calls was at 3/4 ($75), up 3/8 ($37.50).

Those buying call options on Dial better hope that something gets done soon, considering that the options expire at the close on July 21. Also popular were the out-of-the-money July 15 calls, where 585 contracts changed hands. Those options closed Wednesday at 1/2 ($50), up 3/16 ($18.75).

Implied volatility on Dial July 12 1/2 options reached nearly 150 Wednesday, according to

. Implied volatility is watched closely by options market analysts because sometimes when it spikes up it can portend potentially stock-moving corporate news, such as an earnings surprise or a takeover. Implied volatility trends higher if the market thinks a deal is imminent because of the fluctuations M&A activity causes.

As for Dial's stock, it's been a disastrous year for shareholders. As of Wednesday's close, Dial's stock was down 53% in 2000. Last week, Dial issued an earnings

warning, which pounded the company's stock price.

Some Wall Street analysts are skeptical of Dial getting bought out any time soon, however. In a research note after Dial's earnings warning last week,

Deutsche Banc Alex. Brown

said that while some may contend that with its stock price so low, Dial's stock "should be supported by a takeover floor, we remain concerned that the takeover interest in DL has diminished until potential buyers can be sure that the business has bottomed, which should take at least two quarters."

Dial, whose stock surged Wednesday and traded down Thursday for a while, has reversed course and was lately up 3/8 to 12 1/8. Most active were the July 12 1/2 calls, with volume of 200 contracts at the

American Stock Exchange

. The contracts were up 5/16 ($31.25) to 1 1/16 ($106.25).