Manufacturing, housing data sink stocks. VIX bounces back. Read More.

Call volume is picking UUP in the Powershares US Dollar Bullish ETF. Trading under the symbol UUP, the exchange-traded fund tracks being long the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

Shares are up 27 cents to $24.26 and helped higher by comments from Russian Finance Minister Alexei Kudrin Monday, who voiced confidence in the dollar as a primary global currency. The words probably held more sway than usual because they came the day before officials from Brazil, Russia, India and China meet to discuss policy Tuesday. So UUP is up and some players are looking for additional upside, with active trading in Sep 24 calls. 6,100 traded so far. 10,000 UUP options traded total, or about 5X the normal levels.

Smithfields (SFD) is down 69 cents to $11.23 ahead of earnings, Tuesday, before market. DA Davidson downgraded SFD to Neutral from Buy and cut their price target to $12 from $15 Friday. Firm says lean hogs are trading for around $57 per CWT, down from $83 earlier this year Meanwhile, corn has been moving higher, creating profit margin risk for SFD. Yet, with shares down more than 16 percent since May 20, some traders appear to be taking a contrary view o f the situation. 11,000 calls traded, compared to 3,900 puts. June 12.5 calls leading the order flow. Implied volatility is up to 87, from about 78 late Friday.

SPDR Homebuilders Trust (XHB) is down 42 cents to $11.72 and hit session lows ($11.66) after the latest homebuilders sentiment index [HMI] from NAHB showed a surprise 1 point decline to 15 in June (Link to data.) Consensus was for a 1-point increase to 17. XHB faltered. About thee hours earlier, one options trader apparently bought 10000 July 11 puts on the ETF; probably rolling out of a similar position in June 12 puts, which also traded 10000X and expire at the end of this week.

Options players are jockeying for position in Best Buy (BBY) ahead of a Tuesday morning earninings release. Shares are down $1.19 to $37.36, as traders tread cautiously ahead of the electronics retailer’s announcement. 15,000 calls and 14,000 puts traded, or almost 5X (459 percent) the expected for midday. While the brisk trading appears to include action by both buyers and sellers, the heavy volume has implied volatility moving to 55, up from 50 late Friday.

Credit Suisse analysts said this morning that the report is an important one for Best Buy. Investors will be tuned-in to hear whether BBY will reaffirm previous guidance. The firm said that, Best Buy was one of the best stocks for the past 20 years. Why can’t it be the best for the next 5 years? Meanwhile, Wedbush analysts said Friday that they expect BBY to beat the Street estimate of 34 cents per share.

After running 55 percent higher over a little more than three months, the Select Sector Basic Materials (XLB) is down 96 cents to $27.06 on a tough day for metals, chemicals and paper companies. Alcoa (AA) is off 7 percent and the biggest loser in the Dow Jones Industrial Average Monday morning. XLB is an exchange-traded fund that holds all of the basic materials companies from the S&P 500 Alcoa is the fund’s 9th largest component. Monsanto (MON), which is off $1.60 to $84.94, has the greatest weighting in the XLB, accounting for nearly 17 percent of the XLB’s holdings. (Click here for more info.)

In XLB options activity, more than 50K June 28 calls traded about 20 minutes ago. Large blocks hit mid-market for 15 cents and were being sold, according to a source on the CBOE. The selling likely closes out a position ahead of this week’s expiration. Existing interest is 59K.

Rambus (RMBS) has been ripping it up over the past two days and some traders are looking for the stock to run even higher. RMBS rallied 15.25 percent Friday on news the chipmaker reached a settlement with EU anti-trust regulators. Shares are up another $1.07 to $18.46 today and 24K calls traded, compared to 3,700 puts. Action is scattered across June calls with strikes ranging from 18 to 22.5. Some investors are likely closing out positions ahead of this week’s expiration.

Others are buying premium on hopes the momentum can continue over the short-term. Meanwhile, July 20 calls and January 2010 calls at the 30 strike are also busy, suggesting that some investors might expect a move beyond $20 by the July expiration and perhaps to 30 by mid-January. Implied volatility is rallying as well, up to 75, from just under 70 late Friday.

After seven consecutive losses, some investors are betting on casino-operator Las Vegas Sands (LVS). Shares are down 38 cents to $8.72 today and off 14.3 percent since June 4. In the option market, traders are showing increasing interest in June 9 and 10 calls, with a combined 13,000 contracts traded and more than 80 percent of the volume trading ask-side of the bid-ask spread, suggesting buyers are initiating most of the trades. The inceasing volume has implied volatility up to 91.5, from about 86 late Friday. It also comes as LVS tests important technical support levels around recent lows, 200-day MA (click chart).

Spyders (SPY) Aug 92 and 80 puts have jumped to the top of the most actives list Monday morning, as an investor apparently bought the 80 – 92 (2X1) put ratio spread 120000X for about $1.75 on ISE. Both legs look opening.

This is a very bearish “smart money” trade looking for a move down towards $80 per share by August (SPX around 800). Similar risk graph, but with less risk, can be created with the 92 – 80 – 68 put fly. Pay an extra 30 cents for the hedge (lower wing).

Stocks are indicated lower Monday morning, with disappointing manufacturing data and weakness in overseas markets setting the table for an early decline. Forty-five minutes before the opening bell on Wall Street, stock index futures indicate that the Dow Jones Industrial Average might lose 90 or 100 points at the open.

Manufacturing activity slumped in the Northeast area during the first half of June. The New York Empire State Index, released early Monday morning, showed a decline to -9.41, down from 4.55 in May and well below economist estimates of -5.10.

Since the NY index is often a precursor to trends nationwide, some of the cyclical names, like Deere (DE) and Caterpillar (CAT), are lower in pre-market trading.

Overseas markets were already lower before the NY index was released. In Asia, Japan’s Nikkei lost 1 percent and Hong Kong’s Hang Seng gave up 2.1 percent. Germany’s DAX is leading Euro-zone benchmarks lower with a 2.1 percent loss.

Look for weakness in metals, energy, and mining names as well. Crude oil is down 41 cents to $71.63 a barrel and gold slid $3.20 to $937.50 an ounce.

Gold and oil slipped as the dollar gained ground against the euro. The buck was bolstered by comments from Russian Finance Minister Alexei Kudrin, who voiced confidence in the dollar as a primary global currency.

The dollar is down .37 to 98.03 on the yen and the euro lost .0143 to 1.3872 against the buck.

Meanwhile, bonds are holding gains in early pit trading. The benchmark ten-year Treasury bond is up 8/32nd and yields 3.76 percent.