A Profit Day

January Expiration Week Horrible since 1999, Dow down big 8 of last 11 - that's the history.

But it was profit day for OEX yesterday. Traders sold open inventory to as high as 3.60. As a day trade many traded it as low as 2.45 to 3.60 within two hours of trading.

The persistent drop in VIX, the volatility index, reflects the collapse in day to day volatility, the key input into options prices. In fact, the option index that VIX tracks, our OEX, still appear overpriced for what their strike points are.

Remember that institutional traders are using OEX options as hedges on large blocks of stock buys, either puts or calls, and the day to day trader (us) is influenced right now by the overall lack of volatility. All of this has occurred because we have come off of extremes, a blast of upswing over a 6 month period that astounded the world, and had many questioning the soundness of the move.

As if any move in the market is really sound, as we have discovered, much of the market of the past ten years has not even been "real," with betting on cash derivatives that together were more than all the printed money in the world.

This is also a week of earnings. Study to see earnings reports this week from Alcoa to JP Morgan. Volatility may begin.

NOTHING IS EXACT, including the numbers we give you to buy and sell at. Several new subscribers have written recently saying something was not available at the price we specify, to either buy or sell. It is important subscribers understand that we cannot all buy and sell at the exact same price. We provide "ranges". For example, if 22% below your first buy is 2.50, you should buy NEAR that number, if you cannot get that exact number.

So a reminder for those of you that are analytical and want certainty, you won't find it options. Everything happens in ranges.

And we saw a breadth of movement yesterday. Decisions are being made.