Last week was characterized by losses for the first time in over a month, as stocks slid on a weekly basis. The five days finished in the red to quash any hopes of a Friday recovery.
Volatility, as measured by the VIX, peaked Friday at $14.27 the highest level since August 15th before backing down at the close at $13.31. The weekly run was more than 10%, with the $14.50 price above the midpoint resistance of the recent high-to-low over the last six weeks. Option action had 1.7x normal activity with 79% calls traded on the day. Over 135,000 of the Oct $22 calls were in play, with the out of the money strike a full 50% above the close.
The S&P price weakened Friday, losing 12 points at 1985 with a session low at 1980, the deepest depth since August 20th. The SPX marked a 1.1% loss on the five days, with no new highs posted.
VLO dropped 8.5% on the week, closing under $50 for the first time in over a month at $48.82, off 2.85%. Valero is still up 38% over the last 52 weeks. New long positioning in the September 26th weekly $49.50 puts 10,000 lots at $1.10 puts in a price floor, or could be looking for more downside in the next two weeks.
The DOW finished 50 off the day’s low, but still posted a loss of 61 points to close under 17,000 at 16,987. The loss for the week was 150 points in the blue chips, off .9%.
Citigroup added .3% Friday at $52.38 to stay above the Mendoza line on a .5% gain for 2014. 99,000 C options traded, which was 1.4x normal activity and action in the October 3rd weekly’s around $.35.
The Nasdaq 100 NDX was off .5% Friday, down 23 at 4069. A weekly key reversal had the NDX post a new high Tuesday at 4110, with a negative close down 20 points over the five days.
EBAY bounced back 3% to $52.19 with option activity 4.4x normal volume, trading 217,000 contracts on 76% calls. Over 8000 of the October $55 calls were scooped up at the ask, as new long positions were established at around a $1 premium.
Stocks to watch this morning include:
YHOO is up another 1% in the pre market to new highs, after an 8% surge last week, as the Alibaba IPO gets closer. Yahoo is closing in on prices not seen since the 2000 internet bubble
Apple is a dollar and a half from its record peak, plus .5% at $102.20 this morning, asa result of iPhone 6 sales results
YUM brands owner of Pizza Hut and Taco Bell host their investor conference today. Yum shares are down 5% YTD with persistent China woes.
Overseas markets have The Nikei in Japan +.25% to start the week. Europe in steady with the FTSE in London unchanged and the DAX in Germany up .2%.
Stock index futures prices have rebounded from sharply negative overnight selling, with the Emini S&P minus 2 points. The Dow futures are 10 points lower here this morning, with an hour to go before the open of the cash stock market.