CurrencyShares Japanese Yen Trust (FXY) closed up 1.2% in pre-open trading. Overall option implied volatility of 15 is above its 26-week average of 11, according to Track Data, suggesting larger price movement.

Red Hat Inc. (RHT) April 44 calls were active on 26K contracts. April and June call 40 call option implied volatility is at 43. This is compared to its 26-week average of 39 according to Track Data, suggesting traders taking positions for larger movement into Q4 results expected to be released on March 23.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

The markets were full of contradictions last week. Take for example the turmoil in the Middle East. In past crises, investors flocked to the U.S. dollar. But not this time. The U.S. dollar futures contract fell to 76.41 last week.

Another contradiction: the U.S. jobs report was the best in two years, with 192,000 new jobs added. The stock market should have rallied strongly. Instead the Dow fell 88 points. The crises in Libya and elsewhere overshadowed the favorable jobs picture.

Cosmetics giant Avon Products (AVP) unveiled its fourth-quarter earnings this morning, and the results fell short of Wall Street's expectations. AVP's quarterly profit slipped 15% to $229.5 million, or 53 cents per share. Excluding restructuring expenses, earnings from continuing operations declined to 59 cents per share from 68 cents in the year-ago quarter. Revenue rose 1.2% to $3.18 billion.

By contrast, analysts were looking for a profit of 67 cents per share on revenue of $3.28 billion. AVP's fourth-quarter performance was negatively impacted by currency fluctuations, as well as higher product costs.

The eurozone debt crisis is spreading across Europe. The latest Irish bailout is not quelling the fear factor. Now, all eyes are turned to Spain, Portugal and Italy.

What has happened is that banking systems are freezing up, the Financial Times explains. One Spanish banker told the paper, "The bond and credit markets are completely closed."

Euro Currency Trust (FXE) closed down 0.6% to 131.93 , near its 100-day moving average of 132.47. Overall option implied volatility of 13 is near its 26-week month average according to Track Data, suggesting non-directional price movement.

CurrencyShares Japanese Yen Trust (FXY) closed down 0.62% to $117.68. The FXY reflects the price of Japanese Yen plus accrued interest. FXY over all option implied volatility of 11 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

The Financial Times quotes Jonathan Potts saying: "The phones are ringing off the hook." Potts is managing director of Fidel Trade, a U.S. coin dealership authorized to buy coins directly from the U.S. mint.

Potts's statement is indicative of the state of the gold and silver coin market. Mints all over the world are running at full capacity. Among them are:

• David Madge, head of bullion sales at the Royal Canadian Mint said sales of the Silver Maple Leafs had been "extremely strong."

The gold market exploded Thursday with the December contract up $45.50 to $1,383.10 per ounce, as reported in the Wall Street Journal.

As usual, there are lots of reasons for the spectacular rise. The two main ones are currency worries and inflation.

Let's take the currency issue first. The December U.S. dollar contract is hovering just above the 75 level. That level held and the dollar then rose to 89.11. Now it has come back down to the 75 level. A breach of 75 would signal a further move down.

One of the broadest measures for commodity prices is the 19-commodities Reuters-Jefferies CRB Index. For October, the index was up 4.8% after an 8.5% gain in September, as reported in Investors.com.

Sugar and cotton started the trend, rising more than 20% each. Corn was up 17% and arabica coffee rose 11%.

Investors will recall the massive rally in the euro which began at the beginning of June when bearish sentiment reached overwhelming levels. Could a similar pattern take place in the U.S. Dollar? If it does, investors who go long the dollar at these levels will be richly rewarded for taking a contrarian stand on the greenback.

The simplest instrument to use in order to gain exposure to a potential dollar rally is likely the PowerShares DB US Dollar Index Bullish ETF (UUP), which tracks the performance of the greenback versus a basket of foreign currencies. The UUP gained 1.70% on Tuesday, potentially signaling a trend reversal. Investors could also consider buying call options on the ETF in order to leverage their upside.

The U.S. dollar has been under siege since June when the U.S. dollar futures index reached a high of 89.11. In today's trading the index traded at 77.34. According to Federal Reserve minutes released Tuesday, it looks like the Fed is behind this -- engineering a weaker dollar to boost commodities and the stock market and give U.S. exporters an edge in world trade, The Wall Street Journal reports.

The very fact that the Fed plans additional purchases of U.S. Treasuries to stimulate the economy is almost a sure bet to further devaluation of the dollar. The Fed prefers inflation because it is deathly afraid of deflation. The Fed sees inflation as the better of the two evils.

A weekend meeting of global finance ministers was sponsored by the International Monetary Fund to deal with the growing currency imbalances in world economies. The two big players -- the U.S. and China -- instead of reaching a consensus, ended farther apart with each side digging in and pushing back against the other.

Zhou Xiaochuan, China's central bank governor told the Financial Times: "The continuation of relatively low interest rates and unconventional monetary policies by major reserve currency issuers have created stark challenges for emerging market countries in the conduct of monetary policy."

William Dudley, President of the Federal Reserve Bank of New York said today that further Fed easing is needed if the economy does not improve. That was the trigger for gold and oil, which moved higher. Gold set a new record with the spot price at $1,317.10 in London. The December futures contract is trading at $1,317.10, up $8.20, Reuters reported.

The remark about the possibility of the Fed easing also triggered a sharp drop in the U.S. dollar. December futures are trading at 78.51, down 0.428. In a knee-jerk reaction, November oil spiked to $81.24 per barrel, up $1.27.