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Cheers for a three-day hold of 1100 turn into jeers and "movement" towards profit-taking on a crowded trade with no one left to pass the euro to. As of 11:05 ET the SP-500 (SPY) is off a less endearing 1.75% as closely-held support gets more than tested.

Headlines Thursday morning along the lines of "Dollar Sinks Market" have been the bulls' apparent Achilles heel. But with the likes of the benchmark EUR/USD currency pair down but a fraction within a rather tight two week trading range, the real breaking news is a crowded commodity-based carry trade that's likely getting fatigued and participants antsy to "schnitzel a little" without spooking the other guy into a mad money state of mind.

One place where bulls aren't pointing fingers is the economic front as incoming data and reports have been largely good, although there is always that expectation thing to consider. Nonetheless, a surprise from the OECD is pleasantly pegging US GDP growth at 2.50% for 2010.

Separately, weekly jobless benefits boasted an in-line though still large reading of 505K. Leading indicators came in with a mostly matching 0.30% and Philly Fed manufacturing data bested estimates of 12.2 and last month's 11.2 with a figure of 16.7.

One spot is bearing down on bulls and true to the headlines are the semiconductors (SMH, MXIM, MCHP and TXN). This morning BofA's boys at Merrill reduced the industry group and downgraded a slug of component stocks based on "modest inventory correction despite improving electronics demand" via the grapevine of Reuters and Briefing.com.

Leading the downside wallop in price and volume are the world's largest (INTC) and Marvell Tech (MRVL), both of which received calls of "Neutral" from "Buy." Intraday, shares of INTC and MRVL are off 4.50% to 5.50% respectively.

Elsewhere, one spot showing some sizzle are select solar stocks. The group has seen a couple better than expected reports the past week from the likes of Canadian Solar (CSIQ) and Yingli Green Energy (YGE) and JA Solar (JASO). Bulls now have Suntech Power (STP) as a fourth name for some potential fire power.

This morning the Motley Fool's favorite in the solar space due to its "low cost producer" status beat estimates by $0.08 on earnings of $0.16 per share and much stronger than expected sales of $473M versus Street views of $427M, although still down some 20.40% from the year ago period. Suntech went on to boost guidance on its Q4 shipments as well as issuing shipment growth for 2010 in excess of 75%.

Technically and despite the broader market's own misgivings, shares of STP are powering higher. Intraday, STP is up 5.50% near 15.95 and putting the stock fractionally above a tight two day consolidation which follows a substantial upside breakout above downtrend resistance dating back to late July.

On the sometimes accurate heat-seeking option side of STP, traders are most active, sans November, in the December 15 call on nearly 1,400 contracts. While implieds haven't seen much of a drop today, prices in the calls are skewed favorably for bulls. With a short ratio to cover of nearly 5 days, premiums in that type wager is systematically cheaper than those in the puts, as well as being priced below statistical fair value. That being said, if bulls are concerned about getting branded with something other than sizzling results, verticals in conjunction with one point strikes and decent liquidity are something always worth considering.

Chris Tyler
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
Visit Chris Tyler's Forum

The information offered here is based upon Christopher Tyler's observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.

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