1:00pm (EST)

It’s been another battle today as both bulls and bears struggle to gain momentum.  The Dow opened with a slight loss and traded to a low of 10,273 before bouncing back and touching a high of 10,364.  As Wall Street gets ready for the 2nd half of today’s action, the Dow is currently down 30 points to 10,280.

The market got a lift after the November Chicago PMI came in at 56.1, which was better than the 53 estimate that had been expected and is up from the 54.2 number we got last month.  It looks like business activity in the U.S. Midwest is picking up.

As far as specific stocks we are following today…

Dendreon (DNDN, $27.33, up $0.09), which is frequently mentioned here at MomentumOptionsTrading.com, is getting a little bump today on rumors that AstraZeneca (AZN, $44.59, down $0.70) is looking at acquiring the company for $40 a share.  We have been following this stock for nearly three years now and we have repeatedly said that we think Dendreon is a takeover candidate.

We have also mentioned the market potential of the company’s Provenge drug could be as high as $2.5 billion.  The company will also host an Investor Conference on Tuesday from London.  Hmmm…it’s too early to draw conclusions but the CEO himself has said they are looking to partner with someone overseas.

Other water-cooler talk we are hearing…Illumina (ILMN, $28.56, down $0.06) could be on Johnson & Johnson’s (JNJ, $62.57, down $0.32) list as an acquisition target.  There are rumblings that JNJ could offer up to $38 a share for the company.  Illumina has been a potential takeover target for months now and there are several firms on Wall Street who believe the same thing.

It looks like we missed the big move in American International Group (AIG, $29.30, down $4.00) this morning.  We have a history with this company as well.  In July, we profiled two bearish trades in AIG that made our subscribers 70% and 130%, respectively, on put options.  We have been hesitant to go back to the well because of the volatility and the fact that the stock had been making new highs.  In August the stock traded to a high of $55.

We had noticed the consolidation in the $35 area recently but today’s break below $30 has our attention.  Today’s 12% drop in the shares have been a windfall for option traders.  We think there could be further weakness and we take a look at some put options in the Members Area that are up a whopping 360% today!