Standard & Poor's Depository Receipts (SPY) is recently down 42 cents to $106.24 in pre-open trading. February and March put volatility is at 28; April is at 26; above its 26-week average of 24 according to Track Data, suggesting larger price movement.

MSCI Emerging Markets Index (EEM) closed at $37.20. EEM overall option implied volatility of 34 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MSCI Emerging Markets Index (EEM) closed at $42.86. EEM January put option implied volatility is at 27, February put volatility is at 31, versus its 26-week average of 33, according to Track Data, suggesting decreasing price movement in February.

Amex Energy Select (XLE) closed at $59.91. Crude oil futures are recently down .16% to $82.53, according to Bloomberg. XLE January put option implied volatility is at 22, February puts are at 25, versus its 26-week average of 30, according to Track Data, suggesting non-directional price movement.

KBW Regional Banking ETF (KRE) closed at $23.14. KRE February put option implied volatility is at 31, March puts are at 35; below its 26-week average of 41, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Cadbury PLC (NYSE: CBY) rejected Kraft (NYSE: KFT) $16.7B for CBY on September 7. CBY over all option implied volatility of 27 is below its 26-week average of 33, according to Track Data, suggesting decreasing price movement.

MSCI Emerging Markets Index (NYSE: EEM) is recently closed at $39.28. EEM October option implied volatility is at 31, November is at 33; below its 26-week average of 39, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

The U.K.'s Times Online had a story in Sunday's edition asking experts in London for their top ways to make money in '08. Coming in at number 9 was "Israel on the Move."

"British investors have tended to ignore Israel, but its stock market will be thrust into the limelight this year when it is promoted from emerging to developed market status." This is referring to the fact that Israel is up for OECD membership, and if accepted -- and it looks like it will happen -- Israel will join the prestigious organization and be considered a "developed country."

Some pundits have argued that admission into the OECD will actually hurt Israeli stocks as Israel is about 2% of the MSCI Emerging Markets Index, and its share in the global investment pie would fall to 0.2% if Israel is admitted to the developed markets index. What they neglect to mention is that there is a heck of a lot more money under management in developed markets than in emerging markets. So Israel's weighting may drop, but the amount of money available to invest will be substantially more. In addition, don't forget "overweighting." If fund managers believe Israel is an attractive investment destination, then they can overweight their position to a much higher level than 0.2%.

Look out for Israeli stocks in '08.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position long or short in any stock mentioned as of 1/7/08.

Relative to the MSCI All Country World Index, the MSCI Emerging Markets Index is now back to the level it was last spring -- before the bottom fell out.

While some might say that circumstances are much different than they were in the spring of 2006, there are a number of developing threats that leave emerging markets especially at risk.

These include higher bond yields, as I noted yesterday in "A world of rising long-term rates," and the breathtaking but ultimately unsustainable bubble in Chinese share prices.

No doubt equity prices everywhere have been surprisingly resilient, and the fact that emerging market shares are near key resistance may lead to nothing more than a short-term pause.

Nonetheless, any sign of weakness in world equity markets now could see this traditionally volatile sector bearing the brunt of the selling pressure.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.

In recent years, the Bombay Stock Exchange's Sensitive Index (Sensex 30) has loosely tracked moves in the benchmark MSCI Emerging Markets Index. However, since the March 5th bounce in global markets (following the sharp selloff that began in late February), the latter has risen 10.05% vs. only 5.29% for the Sensex 30.

One factor pressuring Indian shares has been aggressive monetary policy tightening by the Reserve Bank of India. According to Bloomberg, Governor Yaga Venugopal Reddy has "surprised analysts three times since December with unscheduled . . . announcements."

Given the relatively wide recent performance gap between the two measures and ample evidence that the Chinese, among others, also seem intent on reining in excess liquidity, could the faltering Indian market be a leading indicator pointing to weaker emerging markets generally?

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.