Signs Of A Bottom?

Since the start of the year, the Dow has last a quarter of its value. And with even with today's late gain, pockets of optimism are hard to find. Having said that, there were some positive signs in the options market this week, which predicted much of the pain were in right now.

Case in point: massive call buying on the XLI, the industrial E-T-F. One trader went out and purchased 250,000 Calls at the April 18 Strikes. And while one trade does not make a trend, it does underscore the fact that some investors are willing to dip their toe back in the water.

But there were some other positive signs out there as well. M&A, long dormant in the wake of the credit freeze, is begging to come back to life, and I'm not referring to Rohm & Hass arranged marriage with Dow Chemical . Check out Genentech , options traders' favorite subject. Roche is back with a renewed bid for Genentech, and DNA's board is still holding out for more.

Who holds out for more money in a depression? We'll revisit that topic tonight on the show.

Another positive sign: oil continues to rally, this despite the relative strength of the dollar. And while some have pointed to China's stimulus plans as one reason, one would have to think if the U.S. economy were really in a "depression," we'd probably see oil at much lower levels.

So with that in mind, we'll keep an eye on signs from the options market that perhaps, after a brutal bashing, we've hit some sort of market terra firma.

Questions, comments send them to us at: optionsaction@cnbc.com

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  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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