Patrick Kernan of Cardinal Capital said the options pits were vastly changed on Tuesday, after Monday's rush by big investors to take on protection against a market decline. Kernan trades S&P 500 options at the CBOE.
"They're selling volatility, meaning there's not a huge concern for a big move. It's a little perplexing to us too. For whatever reason, no one seems to be real nervous, particularly today. Even when we were down (at Monday's lows) we didn't see panic," he said. "It's almost as if it's a good buying opportunity."
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"Right now what we're seeing is the trade is implying we're not going to have any big corrective move in the near future—not that they're correct, but that's what they're implying. I wouldn't feel good about selling them but somebody else does," he said.
The first big day of earnings came and went Tuesday, with little reaction. Reports from Wells Fargo and JPMorgan Chase left those stocks flat on the day. Bank of America reports Wednesday.
"The market seems to be doing pretty well so they didn't do anything to undermine the bullish sentiment. I suspect on balance banking earnings are going to be OK just because of economic conditions," said Mark Luschini, chief investment strategist at Janney Montgomery.
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Fastenal also reports Wednesday morning, and Kinder Morgan and CSX report after the bell. Luschini said rail company CSX will be important for what it says about the economy. "Intermodal travel. Moving things around. ... The transports are always a leading indicator," he said.
Economic data includes PPI and the Empire State survey, both at 8:30 a.m. ET, and the beige book at 2 p.m.
Traders will also be watching Fed speakers—Chicago Fed President Charles Evans at 12:50 p.m. ET and Atlanta Fed President Dennis Lockhart at 5:20 p.m.
Oil and gasoline inventory data is released by the Energy Information Administration at 10:30 a.m. ET.
—By CNBC's Patti Domm. Follow here on Twitter