The market is down halfway through the session and Bernanke is on deck and should be speaking any minute now.

The Dow is down 324 points to 8,987.

It’s frustrating to see the market down for those who are bullish but be patient. The sledding will be choppy but until the Dow and Nasdaq get on a mini winning streak, it’s going to remain that way.

Google (GOOG, $347.71, down $15.00) will be announcing earnings after the close on Thursday. I’m telling you, this one could get interesting. Google’s 52-week low is $310, its high - $747. For a possible strangle earnings trade on Google look at these options.

The October 400 calls (GOPJT, $5.10, down $2.90) and the October 290 puts (GGDVR, $3.40, up $1.15). Together, they would cost $8.50. A 60 point move in Google could give you an 8%-10% gain for a two-day trade.

Have a Coke and a smile brother. Coca-Cola (KO, $45.73, up $2.00) announced a 15% jump in earnings and is eating PepsiCo’s (PEP, $53.51, down $0.89) lunch.

Bernanke just hit the podium and we have headed lower. The Dow is now down over 400 points. He looks nervous.

Good to see Apple (AAPL, $104.28, up $0.19) above $100 again. The November 120 calls (QAAKD, $6.05, down $0.05) should be bought two-to-one against the Novemebr 80 puts (QAAWP, $3.90, up $0.20) if you bullish. Vice-versa if you are bearish.

Chipotle Mexican Grill (CMG, $41.63, down $3.92) has made another 52-week low. Earnings are due out on October 22. Regular readers of the blog know all about this stock first hand. It’s been our own personal ATM over the past year. Numerous negative analyst reports have popped up this week on the restaurant sector which has pushed Chipotle down to ridiculously cheap levels as some would like to think. That may be so, but if they miss earnings, then we could see Chipotle in the low $30’s.

The October 45 puts (CJYVI, $4.40, up $2.25) are getting some love and have doubled this morning. Sometimes it pays to get out of bed early. They opened at $2.15.

Chipotle could still have some more downside risk but if they do miss earnings, the stock may be too cheap to pass up if it get in the $20’s.

Rick Rouse
Rick@OptionsMentoring.com

We’re moments away from testimony from Federal Reserve Chairman Ben Bernanke who will speak before the Senate Banking Committee any moment now. The market is getting crushed again today as Wall Street tries to get a grip on the financial sector. The Dow is down nearly 200 points and is currently trading at 10,855 just 30 minutes into trading.

Merrill Lynch (MER, $24.60, down $1.28) is once again trading lower and the July 32.50 puts (MERSA, $8.00, up $1.75) are having another field-day. I mentioned yesterday that the $4.50 stop could get hit and that you could only sell half of your position. What a great call. Merrill hit a high of $28 on Monday but quickly reversed course after that brief one-hour rally we had yesterday. Merrill reports earnings Thursday so we will be out by Wednesday no matter what. The puts have nearly tripled from our entry price of $2.15 as we have rode Merrill lower like a rented mule. Although there is no-way Merrill will pull a rabbit-out-of-the-hat trick with its earnings, it’s better to be safe than sorry. Raise stops to $7.00.

Elsewhere, Wachovia (WB, $8.22, down $1.62) is now trading below $10 a share. Citigroup (C, $14.22, down $1.00) is headed there. Fannie Mae (FNM, $7.60, down $2.13) and Freddie Mac (FRE, $5.25, down $1.86) are having a race to see who goes bankrupt first. Goldman Sachs (GS, $152.85, down $5.82) looks poised to test its 52-week low of $140.

Rick Rouse
Rick@OptionsMentoring.com