1:00pm (EST) 

Following the flat action from last week and for the month of November, it is no surprise today’s market action has been rather lackluster.  The bulls got off to a nice start but the rally faded on weaker than expected economic news shortly after the opening bell.

The Institute for Supply Management (ISM) Index for November came in at 49.5 versus expectations for a print of 51.7.  It was the lowest reading since July 2009 and snaps a streak of 3-straight months of gains.  A reading below 50 indicates contraction in the economy but market pundits are pointing towards the Sandy effect and are writing it off. 

Elsewhere, U.S Construction Spending jumped 1.4% as residential construction surged 3%.  The suit-and-ties were expecting an increase of 0.5%.  Hurricane Sandy will actually add to this number in the coming months so expect mixed economic reports and the Sandy excuse for a few more months. 

We have added some possible new candidates to our Watch List for possible new trades but we said to expect a trading range for a week or two and that means we are on hold.  Although we are looking at January and longer-term options, we are also waiting for a clear trend to emerge. 

The technical picture we outlined for you this morning are giving clear signals on when we should buy call options, or put options and there will be plenty of time to play the breakout or breakdown from current levels.

We do have updates on our current trades that are holding up well.  We mentioned on Friday that we are 11-4 since late September and our portfolio remains light with “cheap” call and put options.  We have room for up to 10 new trades and we would like to close a few more trades this week because we do believe volatility could get insane if the zombies continue to drag their feet.

The Dow is down 17 points to 13,008 while the S&P is down a point to 1,415.  The Nasdaq is up a point to 3,010.  Subscribers, check the Members Area for the updates and we will be back in the morning with a full report.