I didn’t have to look very far to see where most of the trade was taking place on Wednesday.  AAPL remains in play and when it gets boring everywhere else traders will flock to what is trading.  That remains AAPL and today saw several huge options trade take place.  Most notable would be the 20,000 lot of the Oct 675 calls that traded about 15 minutes into the session at $21.30 with the underlying at $637.55.  It’s not totally clear if it was that one trade that sparked the $5 rally in the 10 minutes after.

Check out Wednesday’s volumes versus open interest within the June weeklies that expire on Friday:

                        CALLS                              STRIKE                                  PUTS

     Volume               Open Interest                                      Volume            Open Interest

Plenty of new buyers moved into AAPL with a renewed interest as to where the stock closes on Friday.  As of Wednesday’s close I would be leaning between $645 and $650.  It nothing else it will make for a couple of interesting trading days.  Remember AAPL carries the largest weighting within the NDX so the recent strong rally in AAPL has carried over to the NDX and NQ.

It is also easier to understand what has sparked the buyers in the NQ this week as the markets open lower giving a glimmer of hope to a correction beginning only to be thwarted by a sudden buying spree brought about by another upsurge in AAPL.

I would expect options volumes to remain strong through the balance of this week and for the stock to basically hold above $640 and below $655.  This is not to say that APPL can’t break below or above these levels and should that occur look for an increase in activity as traders adjust positions accordingly.  Should AAPL break down from here I suspect it would drag the NQ along with it and potentially the SPX, RUT and DJIA as well.

Volumes overall continue to shrink seems that everyone is positioned as they see fit either long or short and while the pot odds continue to favor the larger (deeper pockets) shorts winning ultimately winning this round as rumors abound that several of the TBTF players are now net short to what percentage – I would think that currently the shorts win again even with the continued inching higher to new highs would suggest conceding thus far to the bullish camp.

It isn’t often that as traders we get the opportunity to witness historic highs in equities prices, historic lows in interest rates, unprecedented levels of debt backed by the faith and good credit of the United States government, being sold as US dollar denominated fiat currency within a geopolitical hot bed of potential aggression and land grabs over oil.  Yes, it really does always fall back to the same agenda – the value of the US dollar, interest rates, and natural resources as it flows in and out of the supply/demand factor and what we are willing to pay for it?  What are we willing to do, (to others and ourselves), in order to get it and protect it all in the name of the homeland security.

The situation in the Ukraine is far from over and is becoming increasingly more clear that border concerns stretch from the Black Sea to the Baltic Sea, thus far.  Somehow though it has been erased from the front pages of the news and of our minds.  Replaced with thoughts of summer doldrums, taking a month off and heading to the lake, and getting some rest.  Don’t be lulled into complacency it won’t pay off –

Trading the number remains key to being able to reduce and separate the “noise” from opportunity.  This takes knowing and executing a well-defined strategy and allows you to see opportunities amongst the “chaos” and by trusting the mechanics of your strategy, be able to take advantage of them. 

Opportunity continues to knock on our doors.  While it doesn’t come without risk, risk can be defined and more manageable. Volatility and broad moves are exactly what a day trader desires and being able to respond without questioning is a luxury many are unaware of.