• The market is soaring over 1.5% after better than expected retail sales.  Futures were already juiced heading into the session on strong action in China.

• The VIX is down just 2% this afternoon.  This could be further signs that investors are reaching for protection as they buy into the equity rally at these lofty levels.

• Breadth is very strong despite the lack of strong volume.  Over 85% of all volume is upside volume.

• Goldman Sachs reiterated their conviction buy list rating on Net App (NTAP) and raised the price target to $34.

• Goldman says Tenaris (TS) is in the “sweet spot” for drillers.  They reiterated their conviction buy list rating and increased the price target to $54.

• Goldman reiterated their conviction buy list rating on Pfizer (PFE) with a $22 price target.  They believe the firm is well positioned in China.

• Some interesting bullish activity was seen in the options of Family Dollar.  The action could imply that investors are bullish heading into the holiday retail season.

FDO – Family Dollar – An interesting trade on Family dollar – purveyor of goods priced at under $10.00. The shares are trading 0.6% higher in today’s action and we’ve heard it said that the “dollar-trade” has become a crowded one, meaning that many investors charged headlong into stocks that might prove recession proof. Because it was a popular trade, there is a smaller pool of willing buyers. Hence shares in FDO have failed to capitalize and the $30 price tag looks like tough resistance these days in comparison to the $32 and $35 prices reached during July and April. It appears that an investor bought 10,000 December expiration call options to sell the same amount expiring at the same 30 strike in January. That’s at least what we can tell from time and sales and we are at the mercy of order entry clerks here. Now, if this is the case (both strikes carry only sparse open interest readings and the trade is entered as a spread transaction) the investor hopes for a yuletide boost for Family Dollar while anticipating that shares will become overlooked by January. The December calls cost around 90 cents and the January 30 strike traded at 1.55. Apart from giving the call buyer possible ownership since he can call shares at expiration assuming shares break $30, there is a nice cushion attributable to the extrinsic or time value that delivers value to this investor.