Origin Agritech (SEED) is bucking the bearish trend. Shares are up $1.19 to $9.28 after Charden raised the stock to Buy and said that $30 to $35 million of cash from a recent sale of its stake in a cotton and seed producer will give SEED an edge over its competitors. In options action, volume is 4X the average daily. 5,460 calls and 515 puts traded. Looks like buyers driving trading in Jun and July 10 calls. Possible premium sellers in Jun 8 and 9 call options. Implied volatility is down 5.5 percent to 69.

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

Volatility in the euro is once again spilling over into the US equity market. The European currency, which had recaptured the 1.24 handle early Friday, has recently plummeted back to 1.23 against the buck after Fitch downgraded the credit rating of Spain. The news triggered a volatile reaction in the equity market and the CBOE Volatility Index (.VIX) rallied 3.22 points to 32.90 and is at session highs. Noteworthy trades in VIX Friday included June 25 – 35 bullish risk-reversals, which traded at $1.10, $1.20, and $1.30 in morning action. 64K calls and 72K puts traded total.

*Scanning all single-stocks subject to 2500 contracts minimum call or put volume

Baker Hughes (BHI) is down $2.68 to $38.41 and falling to multi-month lows after the Obama adminstration order the halt of deepwater drilling in the Gulf of Mexico. Yet, in the options, bullish flow detected in Baker Hughes, with 9772 calls trading, or 3x the recent avg daily call volume in the name. Jun 40 calls are the most actives. 5,360 traded (94 percent Ask). Another 1093 June 38 calls changed hands (93 percent Ask). Volume exceeds open interest in both contracts and ISEE data (88 percent) is also consistent with opening customer buyers.

Alcoa (AA) is down 11 cents to $11.71 and morning trades Friday include a seller of 10K Jun 12 calls at 39 cents. It was tied to shares at $11.65 (on a 41 delta). It might be part of an over-write or possibly a liquidation. The contract is 29 cents out-of-the-money with three weeks of life remaining. 15.8K now traded vs. 18K in open interest. Implied volatility in Alcoa is up 2 percent to 49.5 (compared to a 52-week high and low of 76 and 31).

Stocks are indicated modestly higher after big gains seen Thursday. Forty-five minutes before the start of trading in New York, index futures indicate that the Dow Jones Industrial Average might add another 10 to 15 points at the open.

After a 285-point rally yesterday, the Dow Jones Industrial Average is expected to open firm after markets across Asia and Europe moved broadly higher. In Tokyo, the Nikkei added 1.3 percent and, in Hong Kong, the Hang Seng gained 1.7 percent.

Major averages are posting modest gains across Europe after the euro, which saw an impressive move from 1.225 to 1.235 yesterday, is steady at 1.236 against the buck.

In the US, stock index futures came off their best levels, however, after data showed personal incomes up .4 percent and spending unchanged in April. Economists were looking for a .4 percent increase in incomes and a .3 percent rise in spending.

Attention turns to the Chicago PMI at 9:45 and the University of Michigan Sentiment Index at 9:55. Economists expect the PMI at 60 for May, down from 63.8 the month before. Final May reading on UofM Sentiment Index is expected to be 73.3.

Bonds are holding gains ahead of the data and after big losses the day before. The benchmark ten-year benchmark Treasury note, which lost 1 11/32nd yesterday, is up 11/32nd and yields 3.32 percent.

Crude oil is up .24 to $74.49 a barrel and gold lost $2.2 to $1,209.70 an ounce.

Trading is expected to slow this afternoon, as players hit the exits early to enjoy the three-day Memorial Day weekend.