The Greek sovereign debt issue is not yet resolved. After a month long advance the equity markets began wobbling as it realized many Greeks are questioning whether more austerity is the right solution for the debt crisis or whether a new pro-growth approach is needed.

Since the books are closed for January, it is time to update the January Barometer, also called the January Effect.

Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.

As a single cyclical indicator for the global economy, it would be hard to find one better than the sales, earnings and stock price of Caterpillar.

Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities

Last week we mentioned the seasonal January tailwind that was expected to continue through the end of the month unless interrupted by another negative European event.

Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.

While acknowledging perhaps there are better ways to illustrate last week's increasing momentum in the equity markets than Newton's pendulum it does seem to imply the change was rather sudden considering the lingering concerns about the sovereign debt issues in Europe.

Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.

Although volume continues to be very light it should pick up next week as the quarterly earnings reports start to be released and attention shifts from the weak euro to forecasting 2012 earnings. The

As we begin 2012, the first task is trying to determine if there is a definable market trend.

We were encouraged by the three new takeover deals announced last week, but upon closer review, they did not seem to be very attractive from an options perspective.