On a day when the S&P 500 rose to a record high, buoyed by the best day of the year for tech stocks, here’s what Harvest Volatility Management portfolio manager Dennis Davitt will be watching for Tuesday.

1. Whole Foods and Amazon

Whole Foods shares rocketed on Friday after news that Amazon had agreed to pay $42 per share for the company, but what attracted Davitt’s attention was how the stock continued to rally on Monday, closing at $43.22, as bullish bets piled into the options market.

“The upside call buying that we’ve seen in Whole Foods has been robust,” Davitt said Monday on CNBC’s “Trading Nation.” “The Street is also telling me that this is not over, because people are spending a significant amount of money on options that should be worthless if it gets taken out of the current price.”

If the grocery company does find itself the subject of a bidding war, that could be a positive not just for those options buyers.

“If another buyer shows up at Whole Foods, this could have knock-on effects, in a positive way, to the financial sector, and we could see big bank stocks get involved in old-school investment banking,” since these banks will collect fees based on the deal, Davitt pointed out.

2. The VIX

The CBOE Volatility Index slid mildly on Monday, closing at 10.37. Just a month ago, the VIX (which uses options prices to determine the expected future moves of the S&P 500) topped 16, and it rose to 12.37 a week ago.

“Last week’s move above 12 was short-lived, and perhaps a broader market rally will send it once again below 10,” Davitt said.

However, that would spell opportunity for options buyers, he added.

“Once the VIX is below 10, I find there’s a really good opportunity to put hedges on my overall portfolio.”

3. The euro

Traders will begin watching the euro more closely, as the Brexit talks start between the United Kingdom and the European Union.

“With the talks kicking off in the Brexit conversations, this should be a really interesting tell as to how smooth they are going,” Davitt said.

After rising substantially against the U.S. dollar this year, the euro has cooled off over the past two weeks.

Disclosure: Davitt does not have any positions in Amazon or Whole Foods and has none related to the VIX or the euro.

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