OPTIONSMART MORNING UPDATE: Gaining Momentum 

1. OUTLOOK: Stocks managed to erase early losses. The move was led by the financial sector, which actually had been unable to provide a lift to the broader market for most of the session. Investors bet that the fallout from Dubai's debt problems won't have a major impact on U.S. institutions. The tech sector gained momentum. BR Capital believes TXN will narrow its 4Q rev guidance. The analyst remains Overweight on chip stocks. Apple is accumulated by large traders. This holiday season could be Apple's biggest ever, as its newest breakthrough products continue to lure in new buyers. The technical chart indicates bullish momentum. QQQQ implied volatility remains slightly above the 52-week lows. U.S. futures point to a higher open.

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2. FEAR GAUGE: QQQQ implied volatility remained at 25 after the Friday's jump as investors stayed cautious. 

About Implied Volatility.  Investor fear and greed play a significant role in financial markets. The question is, how can investors measure market sentiment in an emerging market situation? How can they gauge the fear? Volatility is a well-known measure of risk in financial markets. When volatility is low, there is a lack of fear. High volatility, however, suggests a fearful markets. Volatility can be calculated in two ways. Either from historical stock price data or from current option price data. Using the second method results in an implied volatility measure. It is a reflection of fear and greed amongst a wide group of market professionals. It’s not wise to ignore this parameter.

4. WISDOM NUGGETS: Recessions create opportunities.  "I made by far the best buys I've ever made in my lifetime in 1974. And that was a time of great pessimism and the oil shock and stagflation and all those sort of things. But stocks were cheap." Warren Buffett, In: Timeless and Time-Tested Warren Buffett Watch Predictions. , By: Alex Crippen, CNN, 30 Nov, 2009.

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