One can thus scan for average ranges outside the one-sigma range. This strategy is looking a gamma scalps or just straddle swings; depending on if traders want to lock in short term profits. The edge here is from statistics. This scan yielded many stocks, but some stocks of note included DE, XOM, TBT, X, SNDK, UNP, IBM, FMCN, NVDA, PCS and AAPL. So according to the rationale outlined above, because these stocks have been experiencing average ranges outside one standard deviation (over the last 21 (Fibonacci) periods) long volatility and long gamma trades could be suggested. There are many ways to estimate the implied move with options. Expected moves can be estimated by taking the event’s ATM (at the money) straddle and multiplying it by 0.85 to estimate 50% probability ranges, ATM times 1.25 for one sigma probability, and finally ATM straddle times 2.50 for the two sigma probability ranges. It also may not hurt to be long Vega going into the political incompetence event known as the ‘fiscal cliff.’

Feel free to e-mail any comments, feedback, suggestions, or general inquiries to… Author salernoma@mx.lakeforest.edu

• Movies are now available through iTunes in select countries located in Europe, Africa, Middle East, Asia Pacific, Latin America, and the Caribbean

• According to a source from The Wall St Journal, Apple has been testing “a few designs” for an HDTV, with Japanese electronics company Sharp

Lets first get one thing out of the way, when dealing with the financial sector today I hate to use fundamental analysis because they’re not reliable. Everyone’s books are poisoned… end of story. What I do want to look for is a solid wave count with volume and aligning technicals. When looking at AIG’s daily chart, dating back to December 2010, you can see the quick drop that brought it all the way from $62.38 to the lows at $19.18 on October 4, 2011. From the lows at $19.18, there are a clear 5 waves up, but everything since then looks very corrective, and is failing to give us a sense of direction. I decided to add Fibonacci retracements to see if it will give us a better understanding of the larger picture. The price action is failing at the 38.2 extension and the 23.6 extension is acting as support. This tells me that this is a simple consolidation period for AIG…. but to help me confirm that it’s a consolidation period and nothing else, I added Bollinger Bands. When Bollinger Bands become squeezed together it means that the price action isn’t having big swings, and indicates there’s a big move coming. We just can’t say for certain right now, which way that is.

Peter Nitso

pnitso@yahoo.com

• Patent gets approved for new intelligent Caller ID

• 47% of consumers are interested and willing to pay a 20% premium over current TV prices

• Had a 38.3% growth from Qtr 3 of 2011 to Qtr 3 of 2012 , based off of findings from research firm IDC

• Adobe will give Retina Display support, like that found on MacBook Pro, for Photoshop CS6 and Illustrator CS6

SMBL has only nine analysts covering it and of them seven have buys and two have holds. To put SMBL into context, WFM trades at 47x TTM, TFM @ 39x TTM, and UNFI @26x TTM (UNFI recently regained its 200-day moving average). It is also important to put this SMBL rally into prospective too, for SMBL was a $6.00 stock a mere 130 trading days ago.

RBC is quite bullish on SMBL, for it was on their ‘top picks’ list and they have a $16.00 price target. RBC notes that SMBL has jumped on the gluten free and plant based packaging train. These two trends represent strong growth areas. According to the firm, “SMBL is on the cusp of being a beat-and-raise story for the first time in its history as a public company.”

SMBL distributes through many channels, for example WFM. UNFI, the cheaper multiple stock, on the other hand, has “several operating divisions aggregated under the wholesale segment, which is the company’s only reportable segment (meaning the other segments are not material – not quantitatively large enough- to report them individually). These operating divisions have similar products, services, customer channels, distribution methods, and historical margins,” according to the UNFI 10-Q.  Basically, the wholesale segment distributes natural and organic, specialty foods, produce, and related products to the USA and Canada. “Other” includes a retail division, manufacturing plant (roasted nuts, seeds, dried fruits etc), and corporate expenses account necessary to operate.

 The average price target for SMBL is $14.00, and considering we are trading around $12.50, this may not be a very good risk-reward trade. SMBL, along with stocks like ABT, should be on one’s watch list if/when we call off the cliff.

Feel free to e-mail any comments, feedback, suggestions, or general inquiries to…

Author

 salernoma@mx.lakeforest.edu