Good morning from Chicago, I’m Alan Knuckman here at the CBOE with your Pre Market Pulse for Monday, September 8th.
In another addition of THE MARKET DOESN’T CARE, the monthly employment report was well short of expectations, BUT it didn’t hurt the longs as stocks surged to end the week. Board gains erased early losses, resulting in another plus day for the markets.
Technology led gainers with the NDX Nasdaq 100 up .6%, closing on session highs up 24 points at 4089. The weekly score for the shortened 4 days was -.4% to total 14% YTD, with a new highs Wednesday at 4104.
A 13,500 lot option block in Oracle collected $500,000 premium in what looks to be a covered call on long stock, with the stock closing at $41.42. ORCL traded 2x normal option activity with the sale of the Oct $43 calls at $.42. ORCL’s 52-week high is $43.19.
Coupon Groupon has stabilized, trading between $6 and $7 for the past four months, closing at $6.82 on Friday. The stock is down 40% this year, with option action in the Jan 2016 puts sold-to-open as a way to get into the stock lower. 3000 of the GRPN $ 3 puts sold at $.15 cents either has at $2.85 buy basis 58% below or get paid $45,000.
The Broad market S&P 500 SPX rebounded from 1990 support lows to close up .5% at just under 2008, plus a nice 10 points. That put the index in the green for a fifth consecutive week, up about .25%, keeping the streak intact.
The XLU Utilities sector ETF closed at $43.62, continuing its rally run. The Sep $42.50 put was in play with 30,000 contracts traded, versus open interest of 10,000. An August 6th swing low at $40 has seen a 7% jump in a month. The June 52-week high at $44.32 is less than $.75 away.
Walgreen is up 15% from its June 52 week high at $63.95, adding 2.4% Friday. Options saw 3.4x normal volume as the 9th most active stock, trading 146,000 contracts at 68% calls. The October $70 calls trade over 7000 contracts, many of them trading at the ASK.
Volatility fell Friday as the VIX lost more than 4%, down to $12.09. The drop last week was a non eventful $.11, with the high Tuesday at $13.41 serving as near term resistance. The volume was low at 370,000 VIX contracts, about 70% of the normal action. A 20,000 lot Nov $17/$27 call spread for about $1 led paper activity.
22 of the Dow 30 were green on a 68 point bump Friday for a .4% pop to 17,137. Blue Chips led gainers last week up .23% with higher highs Thursday to push upward momentum.
Stocks to watch this morning include:
A weekend article in Barron’s has Boeing bouncing .5% this morning on a call shares could rise 20%. BA is the Dow loss leader, down more than 8% in 2014
No soup for you has Cambell’s down nearly 2% in the pre-market after disappointing outlook
One day before the colossal epic giant big Apple event, shares are up .03%, below $100 at $99.35, with the record peak 4.5% above heading into the unveiling of the iPhone 6.
Overseas markets have Europe in focus with the FTSE in London down 1% and the DAX in Germany down .15% . The Nikei in Japan is up .25% to start the new week.
Stock index futures prices are lower with the Emini S&P down 2 points. The Dow futures stand -25 here this morning with an hour to go before the open of the cash stock market.
Stay tuned for more market updates from Alan Knuckman. See you here Tuesday for your Pre-Market Pulse…
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