Looking good Billy Ray, feeling good Winthorp, feeling good. But even though the S&P 500 has cracked through some 1200 level and the Nasdaq is poised to take out important resistance at 2100, I can't get too bullish at these levels. It has nothing to do with the "we've come too far and need a rest" thinking. I am more concerned about how far declining yields due to a slowing economy can take stock prices. At some point, asset allocation ends and profit growth must resume. Those two fellas mentioned above had one wonderful day, and then were smart enough to retire to a pleasant tropical island. The equity-only put/call ratio has dropped to 0.45 and the Volatility Index (VIX), which popped on Tuesday and threatened to start a new uptrend, has given all that back and is now down 9% to back below 13. Altria ( MO) options continue to be active in anticipation that a decision regarding the appeal of the $10.1 billion verdict in the price "lights" suit should be forthcoming in the next few weeks. This has traders focused on the June options, which expire June 17, and has caused the implied volatility to step up to around 32% from 25% in the last three days. Today, the June 70 call has traded over 19,000 times and the strike's open interest has swelled by 50% to 100,000 in the last week. Also, a heads up: Altria goes ex-dividend next Monday -- a nice 73-cent quarterly payment. So for anyone short ITM calls -- and there are 32,000 of you at the $60 strike, and 49,000 at the $65 strike -- you have until Friday, June 10 to take action or risk an early assignment. SPDR Financial Select ( XLF) is again seeing above-average call activity. Today's focus is the June $29 strike, which has traded some 3,000 contracts. Prior open interest in the strike at 29,000 is more than sufficient to cover, but I have a feeling this is an opening sale as investors appear to be positioning toward a consolidating landscape and flattening yield curve. Tuesday, both Merrill Lynch and J.P. Morgan saw big blocks of calls rolled from June into July. This appeared to be less about speculation than gathering in some more premium in a group that is likely to see limited gains in the near term. On the other hand, E*Trade ( ET), Ameritrade ( AMTD) and Toronto Dominions' ( TD) TD Waterhouse, which have all confirmed merger talks, are seeing very little option activity and barely a rise in their implied volatilities. I guess no one foresees a bidding war taking prices much above current levels or a larger third party coming in to make a play. Hey, Google ( GOOG) options are popping up all over the most active list, as the stock starts marching toward its $300-per-share destiny, making heroes of its true believers and proponents and sentencing the cynics to a world of damnation, pain and regret.