There was no mixed message in stocks yesterday, with a bounce from bottoming on higher lows in two of the three major markets. The shorts got shocked with a rebound, back above the resistance half way point of the sell off from record highs.
The discount sale in tech was short lived, with a .9% jump in the NDX Nasdaq 100, up 37 points at 4067, gaining back almost all of Monday’s drop. The NDX is a mere 44 points away from recent record September 9th at 4111.
Zillow was a big gainer, plus 6% to $133.26, bouncing of the 120 level once again this week. Z has record highs at $165, and had fallen after merger talks with Trulia earlier this summer. The January $150 call traded almost 900 contracts.
The DOW gained triple digits, with a .6% rally to 17,132. The DOW total is now plus 3.35% for 2014, closing in on all time highs in the blue chips. Only one stock, NIKE, was negative on a bright green day.
Dupont saw heavy option volume, 4 times normal, trading on the call side for the second day in a row and closing up .8% at $65.83. DD has been stuck largely between $67 and $64 since late June.
The broad market S&P SPX index pushed above the Y2K mark intraday, peaking at 2002 to close at party like it’s 1999. The gain was 15 points, .75% on the day, to put performance back plus 8% YTD.
New relative highs pushed the VIX month and half midpoint pivot, with highs at $14.53 early before the downward fall to $12.73, on a nearly 10% daily decline. Support sits at $11.24 from August 25th the lowest level in the last two months.
The last day of September expiration VIX options traded over 1,100,000 contracts, more than twice the normal volume. The October $21 and $17 calls were the most active deferred month options.
JCP also had call action with the October 10th weekly $11 calls 5500 lots at the ask around $.50. JC Penny closed at $10.90, putting the option expiration break even 5.5% higher.
Ford has fallen from the $18 mark end of July to close at $16.52 Tuesday. After a dip to $16.16 lows, F saw call buyers in the SEP $16.50’s nearly 5000 contracts for $.11. Those options are now in the money, but the level to watch is the expiry break even at $16.61.
Stocks to watch this morning include:
Adobe beat the street by $.02 with earnings numbers yesterday afternoon, but the pre market has shares down 4% at $67.50 this morning
Lennar is plus 5% after announcing EPS of $.78 versus $.67 expected and revenue above estimates
The aforementioned Dupont, which had unusual call option activity, is plus 4% as investors are talking about a company breakup to unlock value.
Overseas markets have The Nikkei in Japan -.1%. Europe is green with the DAX in Germany plus .4% and the FTSE in London up .1%.
Stock index futures prices are steady, with the Emini S&P unchanged and little over 10 points from the all time December contract highs. The Dow futures are 5 points higher here this morning with an hour to go before the open of the cash stock market.