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With one major hurdle to go, investors are showing a slightly confident “Yea” in front of policymaker’s “New Deal Version 2.0.” As of 10:45 ET the “Cubes” (QQQQ) and “SPYder” (SPY) are up 1.80% to 2.30% on more of the same volatile and above-average efforts at daytrading.

As to keep “We Know Drama” television via CNBC interesting, previously concerned hands still waiting on a House pass (now expected) of the $700B bailout are showing a bit of optimistic TGIF magic in the major averages. Not that there’s anything wrong with that, of course.

More to the point for Friday’s early bulls, better-than-feared results from a still clearly weak labor market (6.1% & -159K) and climbing a wall of worry in front of some anticipated clarity, regardless of the bill’s actual long-term efficacy, certainly provide incentive—as does some anti-government and evil short covering from a thumper of a Thursday.

Also helping “mooove” the market higher from Thursday’s ready-made snapback platform, a surprise stock-for-stock $15.0B snapping up of the recently whacked Wachovia (WB) by the now much more formidable peer Wells Fargo (WFC) has investors cheering. The deal translates into $7 per share for beleaguered bulls.

Compared to Monday’s Citi (C) offer of $1 per share, the news is certainly worthy of some value-added hand clapping for Wachovia; although a far cry year-to-date highs near 40. However, the agreement also looks to be completed without any government handouts, umm FDIC assistance, which acts as a confidence booster / support for the overall market. That being said, investors are applauding shares of WFC higher by 5.40% and WB by 67% to 6.50, while the snubbed but survival gear ready Citi is off by 10% near 20.25.

In passing and also “moootivating” the bulls, Thursday’s lead story stock drubbings are finding stable-to-higher ground to their liking. The Aggies (MOO) are up 6.25% with the previously fingered and mauled Mosaic (MOS) snapping back by a beta-hungry 11.75% to 44.35. And separately, shares of General Electric (GE) and Warren Buffett’s latest value-based hunter-gatherer efforts, are up fractionally by 1.25% at 22.45, following yesterday’s $15.0B capital raise news and stock shellacking by investors other than the Oracle of Omaha.

Elsewhere and in those sometimes pesky intertwined markets, both the Yellow Metal (GLD) and Black Gold (USO) are finding fractional bids of 0.50% to 1.00% intraday. A slightly weaker US Dollar (UUP), improved sentiment that the economy is crappy but maybe not bicycle time just yet and technical tidbits such as sometimes hard-to-handle pullbacks and double bottoms, respectively, are all likely encouraging Friday’s nibble by bulls.

Looking at what’s driving option investors, in the NASDAQ100, Apple (AAPL) is seeing some unusual action that’s likely to have provoked both jeers and cheers. Most active on the board are the OTM October 90 Puts on just more than 10,000 contracts and currently priced at 2.35 or 100% IV versus 105 in the stock.

Shortly after the Opening Bell, a CNN iReport poster (blogger) alerted that Steve Jobs was rushed to the hospital following a massive heart attack. An iPod nanosecond later, AAPL shares dropped to fresh yearly lows near 95 before rebounding and reclaiming several points of lost ground after Apple’s PR department denied the report. With Sour Red and Green Delicious price action in the mix, there seems to be something for everyone…maybe.

And finally, entering the lunchtime hour the majors are a bit beefier in noshing on the green stuff. More important, either you’re in it and acceptant of the consequences when the House vote crosses the headlines; or you’re not. Not that there’s anything wrong with either. Having said that and continuing to see perma-bulls as having been put through the price wringer, I’m still voting in favor of old Wall Street averages failing to work in the S&P500. However and mostly quoting from yesterday, in a still very mad money market; daytraders and option-based hedgehogs remain the only clear favorites.

Chris Tyler
Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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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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