Goodbye Fast Lane, Markets to Shift Into Slower Gear: Najarian

If you’ve had enough market excitement to last you a lifetime, we’ve got some good news. OptionMonster Jon Najarian sees slower days on the horizon.

In fact, some days could become downright boring.

“We’re about to see a lot more days like Friday when the market wasn’t doing much,” he says.

What makes Najarian says something so unthinkable, so controversial, so outrageous??! – Why unusual options action, of course, identified by heat seeker!

And this time the unusual action was in the Vix – the fear index.

First some background.

“Volatility traded down below 20 this week, the lowest level since US debt was downgraded,” Najarian explains. In other words, fear in the market is at its lowest levels since last summer when S&P stripped the USA of its triple-A credit rating.

Now the thesis.

Despite the lows, institutional investors are not playing volatility for a bounce – they’re betting on more downside. “They’re jumping in on the Feb 19 puts in really big numbers,” Najarian says. “They’re thinking the Vix might slide a lot lower, into the mid-teens,” he adds.

Considering a lower Vix signals market moves of lesser magnitude, Najarian thinks smaller swings - both higher and lower - lie ahead; hence, slower days in the market.

Maybe bring a book to work.




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Trader disclosure: On Jan 19, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Grasso owns ASTM; Grasso owns AVAV; Grasso owns BA; Grasso owns D; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns WFT; Grasso owns XLU; Dicker is long SLB; Dicker is long BHI; Dicker is long HP; Kinahan is long C; Kinahan is short GS; Kinahan is long XLU; Kinahan is lng CSCO; Kinahan is short YHOO puts; Kinahan is long MSFT; Karabell is long AAPL; Karabell is long IBM; Karabell is long GOOG

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