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.

As I was looking at the VIX trading relative to the SPX, I was struck by a few things

I know it might sound funny, but it is possible that the first quarter of 2012 could be a really boring quarter.

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

I have to admit, while I have been expecting the VIX to return to normalcy, I have been shocked at the speed at which it moved down.

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

I feel like that title is worthy of a WWF Cage Match special. But really folks, there is something else going on.

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

To say that IV got oversold yesterday morning is a bit of an understatement.

In the midst of one of the lowest volume trading days of the year it took little effort to push S&P 500 futures down.

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.

With the political activity relating to the sovereign debt crisis most likely to diminish this week, we speculate there will be fewer downgrade announcements coming from the rating agencies along with an absence of central bank comments, which could mean there could be some pressure relief going into yearend.