While there was indication from options open interest that we'd see an up day today, the real drivers were M&A (excitement over the huge premium that aQuantive received) and even China. It was so nice of the Peoples Bank of do their rate, currency and reserve adjustments on a weekday for a change. The Chinese moves answered questions and concerns investors have had concerning China and its handling of overheating stock markets. While the moves on the part of China are small ones they at least lean in the direction of action being taken even if the Shanghai market continues to look risky and vulnerable.
S&P 500 finishes at a 7 year high - just 5 points shy of a new record. Will the record close happen Monday? I actually wouldn't be surprised to see the standard Monday post options expiration reversal at least early on. But the S&P's move above 1520 is an encouraging breakout for the bulls from the recent range bound trading below 1515. I could drag any number of indicators out to worry and fret about the level of the market. Someone the other day even featured comments in one of the comments threads in the blog about someone becoming "ugly bearish". Whether this is 99/2000 all over again when "overbought" meant nothing - I'm not certain, but it seems that bearish bets placed too early will be fatal. I'm of the opinion that The Trend Is Your Friend and when it's over you'll know. My eye will continue to be on 1500 as important support and then 1460.
It was a fairly quiet trading day for me today. I faded the spike on IGT (IGT) by picking up some June 40 puts earlier this morning and dumping them before the close with the stock down more than a dollar from its merger rumor high of the day. Elan (ELN) caught my eye today, in particular the June 17.5 calls where volume was on the extreme side especially relative to open interest. I'm holding that through the weekend, though I was thinking Biotech conference catalysts. There are also Biogen (BIIB) buyout rumors floating around concerning ELN. 25,000 ELN June 17.5 calls traded today vs open interest of 2,400.