1/19 Morningline: VIX play prairie dog

The volatility measure, the so-called fear index or VIX, popped out of its hole, gapping up to open 5.2 percent above Friday's close and briefly showed a pps bull signal, which disappeared within minutes. The index then popped back down.

Blue-chip stocks opened quietly at the lower end of Friday's bearish trading range, a 1.4 percent decline from high to low, and then began to retrace the decline.

The price of Treasury long-term bonds gapped down by about a third of a percent. Crude oil opened down by nearly a percent from Friday's close, and then began to rise.

It was the sort of morning where the seas were calm but the sun rose into a red sky that faded to pale pink. Sailor take warning?

Let's run the numbers . . .

Indicators: Blue chip stocks (SPY) are trading at 114.28, entered bear mode at close on Jan. 15 (at 113.64) Fear index or volatility (VIX) , bear (bullish for stocks) 18.21, Jan.5 (19.35) Treasury long bonds (TLT) 90.46, bull, Jan. 12 (90.32) Corporate junk bonds (JNK) 39.73, bear, Jan. 13 (39.85) Gold (GLD) 111.27, bear, Jan. 12 (110.49) Oil (USO) 38.69, bear, Jan. 12, (39.63)

Forex currency pairs:

• Dollars per euro (EUR/USD) 1.4293, bear, Jan. 15 (1.4512)
• Yen per dollar (USD/JPY) 91.09, bear, Jan. 12 (90.97)

Stock options holdings, February expiry:

• CVS, iron condor (p29/-p31/-c34/c36) 33.72, bull, Jan. 5 (32.85)
• ORCL, bull put spread (p25/-p27) 25.43, bull, Jan. 13 (24.80)

My covered call scan, published Sunday, led with PALM as an immediate candidate for the position. The stock has moved up closer to the 14 strike price was looking at, adding 5 cents to the premium, and still looks good for a possible entry near today's close.



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Topics:
S&P 500, SPDR, Spiders, Treasury bonds, high-yield corporate junk bonds, gold, precious metals, oil, petroleum, CVS, pharmacies, drugs CVS, pharmacies, drugs Palm smartphone.