European stocks are trading down as there are protests over austerity measures in Spain and Greece.  There are signs of flagging confidence in the reflation trade executed by the Federal Reserve, the ECB, the Bank of Japan, the Bank of England, and China’s government.   The S&P 500 has given back nearly all of its gains from the post-QE3 announcement rally.  A mere five points is all that stands now between the level the S&P 500 was trading at the day before the FOMC decision.  The yield on the 10-year Note is 12 bps below where it was trading on September 12.

For the moment, oil prices are declining (-$1.29 at $90.08), semiconductor and transport indexes are lagging, the euro is fading, and major equity markets are on the defensive.  Our market sentiment indicator remains bullish which indicates the intermediate term up trend remains in place.

In DFC Global (DLLR), there was an opening buyer of 1300 Jan 17.5 calls.  This was 114x normal volume.  The at-the-money implied volatility is at a 52 week low.

In Jakks Pacific (JAKK), there was a buyer of Oct 15 Calls.  This was 29x normal.

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