2/12 Morningline

Currencies are on the move this morning. The dollar opened the U.S. trading day with a 1.2% rise against the euro (EUR/USD) and a 0.9% increase against the yen (USD/JPY).

In each of the currency pairs, the price then pulled back to within yesterday's trading range.

Which illustrates the general conservatism of the morning.

Blue chip stocks (SPY) opened 1% below yesterday's close, but didn't follow through. Treasury long bonds (TLT) opened half a percent above yesterday's close, and then sat spinning like a top -- lots of motion but little progress.

The fear index (VIX) mirrored yesterday's range. Where on Thursday fear dropped like the madly laughing operator of a runaway elevator, today it shot up like a paranoid fireworks display opening an Olympics.

Shakespeare said it: Today's markets are a tale "full of sound and fury, signifying nothing." Which sounds like a perfect famous-last-words setup for a major market move. Or not. Gold (GLD) showed a weak macd bull signal, and oil (USO) was showing bull signals -- an earlier bear signal proved to be a phantom. Among holdings, CVS (iron condor) was in the second day of a macd bull signal, unconfirmed by a price increase.  The position, trading around $33, is maximally profitable between $31 and $34. Sweet. ERTS, an iron condor hammered on Feb. 9 by a 9% gap down on earnings, moved back into profitable territory. It expires next week. Double sweet. To the numbers: Indicators, at about 10:00 a.m. Eastern: Blue chip stocks etf (SPY) is trading at $106.94, entered macd bear mode at close on Jan. 21 (at $111.70)

How hedge fund manager John Paulson earned $15 billion through smart trading in the collapse of the housing market and subprime mortgages.

• Fear index or volatility (VIX) 25.20, bull (bearish for stocks), Jan.21 (22.27)
• Treasury long bonds (TLT) $90.18, bear, Feb. 10 ($90.32)
• Corporate junk bonds (JNK) $37.11, bear, Jan. 20 ($39.63) 
• Emerging markets (EEM) $38.16, bear, Jan. 20 ($41.77)
• Gold (GLD) $106.34, bear, Feb. 4 ($104.37)
• Oil (USO) $36.04, bull, Feb. 10, ($36.51)

Forex currency pairs:

• Dollars per euro (EUR/USD) $1.3531, bear, Jan. 20 ($1.4106)
• Yen per dollar (USD/JPY) ¥89.91, bear, Jan. 12 (90.97)

Stock options holdings, February expiry:

• CVS, iron condor (p29/-p31/-c34/c36) $32.96, bull, Feb. 10 ($33.21)
  
• ERTS, iron condor (p15/-p16/-c18/c19)  $16.20, bear, Feb. 9 ($15.96)
• MCO, covered call (-c30) $26.72, bear, Feb. 4 (26.39)
• PALM, covered call (s/-c13)  $9.97, bear, Jan. 26 ($11.17)

Stock option holdings, March expiry:

• CSCO, iron condor (p22/-p23/-c25/c26), $23.58, bull, Feb. 8 (23.50)

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