Condor Options

As we said in a premarket note this morning to subscribers, several of our volatility-based indicators flashed buy signals, and after the morning washout, markets rallied back above yesterday’s lows.  Today’s signal was good for at least 11 S&P futures points off the open, and we expect to see a bit of positive follow-through next week.

The headline story of 2008 is still holding true: a rally in financial stocks is still a necessary but not a sufficient condition for a broad market rally.  Today, the story was speculation about Lehman giving up their remaining decent assets to buyers; the financial sector ETF (XLF) was up 3.6%, with banks ($BKX) up 4.8%.  While these sorts of news items are good for a quick boost, nothing is going to change the fact that the U.S. economy (and increasingly, it seems, the global economy) is not fundamentally sound.  As Jim Kingsland put it today:

The July lows are almost within clear sight and likely to be retested.  Only space aliens with hoards of cash and a book called “To Serve Man – THE SPECIAL WALL ST EXEC RECIPE EDITION” will likely get the market out of this longer term downtrend.

Some tech reading to start your weekend:

• Dvorak can’t find a reason for Google’s new browser to even exist.  Fair enough: but our view is that if it gets one – just one! – Internet Explorer 6 user to start using something else, then that’s reason enough.
• Coverage of the unfunny Microsoft/Seinfeld ad abounds, but let’s pile on anyway: what the hell?  Jerry shouting “you mean you don’t shower in your dress shoes?!” or whatever would’ve been funny, say, 10 years ago.  Maybe.
• Stormpulse is a very cool site for tracking hurricanes.  Right now, you can see Hanna, Ike, and Josephine all on the way.

P.S. If you haven’t already, be sure to sign up for a membership spot in our new calendar spreads product, Calendar Options.