1:00pm (EST)

The market started off on a strong note but has given back some of its gains as Wall Street awaits Alcoa’s (AA, $17.25, up $0.23) earnings report.  The Dow is currently up 10 points to 10,628 while the S&P 500 is off by 3 points to 1,142.  The Nasdaq is showing a decline of 13 points and is trading at 2,304 as we head to press.

The VIX is down 0.56 to 18.36, Oil is up fractionally at $82.75 and Gold is up $16 to $1,155 an ounce.

Alcoa will report earnings after the bell and Wall Street is looking for a profit of 6 cents a share on revenue of $4.8 billion.  In the year ago quarter the company reported a loss of 28 cents a share on revenue of $5.7 billion.

The options pits are exploding with traders placing bets but we are staying on the sidelines with this one.  The January 17.50 calls (AAAT, $0.53, up $0.25) are up 90% and have traded nearly 30,000 contracts while the January 17.50 puts (AAMT, $0.77, down $0.22) have dropped over 20%.  This means the market is pricing in a 7%-8% move in the stock and a straddle trade would cost you $1.30 at current prices.  No thanks, we’ll pass.

We have been busy updating our portfolio positions this morning and we were able to get into two NEW trades at the open.  We are also CLOSING one trade for a slight profit to make room as we like the prospects a little better on our newer trades.

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