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Get ready for anything today! With IBM's earnings, today should be the day for 12,000 but -- you never know...

We have the CPI at 8:30, and if it's as inflationary as the PPI was yesterday we should get a real sell-off. But the CPI does not tend to be as volatile, and that's where bets are being placed this morning.

Asia took last night's mixed earnings reports with a shrug, and were up slightly across the board. India traded down slightly as profit-taking kicks-in coming into next week's 3-day holiday. Europe is up a bit ahead of our open. Indian Tata Steel is buying UK Corus for $8B. This indicates a shift in Indian policy that may drive additional acquisitions.

As we could go either way at home lets keep our eye on good and bad levels for our indices:

  • Dow 12,000 good, 11,900 OK, 11,865 bad
  • S&P 1,370 good, 1,360 OK, 1,350 bad
  • NYSE 8,700 good, 8,600 OK, 8,500 bad
  • Nasdaq 2,375 good, 2,330 OK, 2,300 bad
  • SOX 478 good, 470 OK, 460 bad (so watch closely!)
  • Trans 2,650 good, 2,600 OK, 2,550 bad

See how easy it is to play the markets? Don't buy when things are bad, don't short when things are good -- hardly worth watching.

What I am sick of watching is this oil farce, as they jacked Brent crude up from a loss to a gain this morning. Crude is, according to CNBC, still trading at $58.44 (7:25) but this will be tricky as contracts roll over.

We should get a nice downward move for the oil sector in the morning, but I will have a very itchy trigger finger on those October puts we picked up at yesterday's close.

The big oil news today will be Occidental Petroleum Corp.'s (NYSE:OXY) earnings, and it looks like I was right on the oil side, but they were saved by their chemicals business, which benefited from lower oil. It will be all about the inventories later to set a real direction!

Assuming we stick with the current contract today, let's continue to eye the $59 line, which has firmed up nicely as a top. Of course a dip back into the $57s will be very good for oil puts today. I wouldn't consider making an oil move that isn't confirmed by the Valero Rule this week!

Gold is still on a quest to break $600, and today was my deadline for them to do it before the death cross. Of course the dollar matters a lot more than gold itself, and it's having its own trouble at the declining 200 DMA, but the 50 DMA is rapidly coming out of its own death cross and may help push the dollar higher and take global commodities down a peg.

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We have more earnings today and things are shaping up nicely so far. As with all pre-earnings plays, consider it about the same as putting your money on a craps table at the casino, and bet accordingly. There is no way, this early in reporting, to be sure (or even reasonably sure) of anything:

JPMorgan & Chase Co. (NYSE:JPM) came out with very good earnings, and we'll see if they get treated better than Merrill Lynch & Co. Inc. (MER) did yesterday. JPM got a nice bump from being on the other side of the Amaranth trade!

Apple Computer Inc. (NASDAQ:AAPL) comes out after the bell, and imagine the shock if they don't beat! Much as I love that company, I can't bring myself to buy any at this price (ever since I didn't get filled on my $52.50s back in July this run has been killing me!). Apple may not be able to give much forward guidance, as the option investigation continues.

eBay Inc. (NASDAQ:EBAY) also reports tonight, and I've already said my piece on them, but I doubt Meg had time to implement my changes yet, and we will see how things are going. Frankly I'm hoping for a disappointment so I can get back in!

AMR Corp. (AMR) will put pressure on the transports if they can't hit their marks. Airline math is a special sort of wonderland calculation that would make Einstein cry, but it looks like they should hit their mark. They've sold off a lot this week as lesser mathematicians are panicking, and I regret not buying the Jan '09 $30s for $5.60 I had my eye on.

SIGA Technologies Inc. (NASDAQ:SIGA) has cured smallpox! This is huge as a bioterror protector, and bodes very well for other cures down the line. We've had a vaccine for years, but this makes existing cases go away. I'm not saying to buy them, they will go up too fast, but I am very pleased that we are making such great progress in this field!

Tomorrow we have Coca-Cola Co. (NYSE:KO), who I like if the market stays strong today with the Nov $45s at just .35.

Citigroup Inc. (NYSE:C) will be a tone setter tomorrow and I think they will miss but I'm the only one and I gave up on my puts a while ago. Bank of America Corp. (NYSE:BAC) also reports.

Google Inc. (NASDAQ:GOOG) has earnings tomorrow, but I'm not paying $8 for a $10 out of the money call, that's just silly!

Nokia Corp. (NYSE:NOK) has earnings tomorrow and, despite Motorola Inc.'s (MOT) poor report (which wasn't actually bad at all), I still think I'm happy with my $20 calls and I will buy more if they are back at .35 or less!

Does anybody remember when Pfizer Inc. (NYSE:PFE) was a safe stock at $35? I do, it was 2 years ago... I like the Nov $27.50s for .75 ahead of earnings.

Read all of Phil Davis's articles on Seeking Alpha.

Source: Options Trader: Wednesday Morning Ideas