Toll Brothers, Inc (TOL) is a homebuilder who designs and builds homes in residential communities. The company’s stock is currently trading at $36.75 in a 52 week range of $26.64-$39.25. The stock underperformed the market last year as shares only rallied 1.63% over the past 12 months. However, options action TOL in today’s trading session suggests that traders believe the stock will rally through September expiration. Earlier in today’s trading session a trader bought 16,000 TOL Sep 37 calls for $3.95. Over 20,000 contracts have now traded on that line and today’s option volume in TOL is now nearly 8 times the average daily option volume in the name. With stock trading well above the Ichimoku Cloud and the future cloud sloping upward we believe that TOL is setting up well for a long position.

Trade: Buying the TOL Sep 37 Calls for $3.95
Risk: $395 per 1 lot
Reward: Unlimited
Breakeven: $40.95

The January unemployment number was announced this morning showing slower than expected job growth in January. Analysts were expecting around 180,000 jobs to be added while the actual number came in at 113,000. The unemployment rate also down ticked from 6.7% to 6.6%. Markets traded lower initially then swung wildly from lows to highs and E-mini S&P 500 futures are now trading 14 points higher on the day trading in a 27.75 point range. LNKD reported quarterly earnings this morning announcing better than expected earnings but lowering guidance. TWTR and FB are both higher this morning with TWTR rallying nearly 4%. Looking to next week we see few catalysts and could expect relatively muted moves in the broader market. We have been seeing some bullish activity in retailers like JWN, TJX, and LB which could represent speculative bets ahead of next week’s retail sales number on Thursday. We will likely revisit potential long set ups in those names ahead of the number.

The Global X Uranium ETF (URA) is an ETF that tracks the Solactive Global Uranium Index which seeks to track the performance of equities involved in the uranium industry. Shares of URA are currently trading at $15.40 in a 52 week range of $13.82-$21.27. URA seriously underperformed the market last year with shares falling by over 27% in the past 12 months. However, despite weak historical performance, options action in today’s trading session has been very bullish and suggests that traders believe URA will be strong through April expiration. Earlier in the session a trader bought 1,000 URA Apr 16 calls for $0.55. Over 4,700 have now traded on that line and today’s option volume in URA is nearly 16 times higher than normal. With URA trading above the Ichimoku Cloud and this extremely bullish order flow we believe that URA sets up well here for a long.

Trade: Buying the URA Apr 16 Calls for $0.60
Risk: $60 per 1 lot
Reward: Unlimited
Breakeven: $16.60

Today saw a choppy session for U.S. equity markets as earnings and economic data sent markets lower in the morning before bring them back to close in positive territory. ADP Employment numbers were released this morning coming in slightly above to in line with most analyst estimates. January ISM non-manufacturing numbers were also released today coming in slightly higher than analyst estimates.  Today after the bell TWTR will make their first ever quarterly earnings announcement, a release that will be highly scrutinized. Markets are likely range bound today in anticipation of earnings releases and economic data tomorrow including jobless claims. As far as earnings we are looking for moves higher in TWTR, GMCR, and YELP. Bullish order flow in BG also led us into a long call position today and profits were taken in several old long positions. Looking to Friday we will continue to be selective about new longs and will likely continue with caution going into the release of the January employment situation.

Bunge Limited (BG) is a worldwide food processing and agribusiness company with operations across the entire agribusiness space. The company’s stock is currently trading around $74.45 in a 52 week range of $65.74-$84.18. The stock has been underperforming the market over the past 12 months with shares falling just under 7% over that time period. However, options action in today’s trading session suggests that traders believe this trend will reverse and that the stock will rally through February expiration. Early this morning a trader bought 3,656 BG Feb 75 calls for $1.30. This is a very bullish trade that exposes this trader to over $475,000 in risk. This block also represents volume over 6.5 times the average daily option volume in BG. Although the chart of BG is very weak we believe that this bullish order flow is a good signal for a long in BG.

Trade: Buying the BG Feb 75 Calls for $1.40
Risk: $140 per 1 lot
Reward: Unlimited
Breakeven: $76.40

U.S. Equities open moderately lower this morning as ADP Employment numbers were released this morning coming in slightly above to in line with most analyst estimates.  The report also saw Decembers numbers revised lower.  Markets did spike higher for a short period after the release of January ISM non-manufacturing numbers which came in slightly higher than expected. E-mini S$P 500 futures then reversed hard and are now trading lower by around 6 points. Last night saw the release of quarterly earnings of Myriad Genetics, Inc. (MYGN) who reported higher than expected earnings of $0.66 per share, beating consensus estimates of $0.46 per share. The company also raised its full year guidance and the stock is currently trading higher by nearly 10%. We were long MYGN Feb 7^th Weekly 28.5-29.5 call spreads going into the release and will net maximum potential profit if the stock closes above $29.50 on expiration. Again we will look for unusual order flow throughout the day as markets continue to slid from the highs.

Markets breathed a small sigh of relief today as E-mini S&P 500 futures closed higher by 16.50 points on the day after one of the worst single day declines in months.  Markets well buoyed in part by the release of January factory orders, which came in above analyst expectations. After the close we will watch earnings from BIDU and a few names reporting tomorrow.  Tomorrow morning will see the release of ADP Employment and ISM Non-Manufacturing numbers. A slew of other earnings releases are on tap for the week along with the release of the Employment Situation on Friday so traders will not lack opportunity this week. For earnings tonight and tomorrow morning we have longs in MYGN and GILD and a short position in BIDU.  We will continue to take profits on broader moves higher and will continue to keep a close eye on earnings in a week filled with catalysts.

E-mini S&P 500 Futures open this morning and have been trading in a choppy range. Although futures are trading higher by around 12 points right now we have seen them trade in a 10 point range today. Equity markets seem to be holding their bid for now as January factory orders were released this morning and topped analyst expectations. There are no more major data releases today so eyes will be on individual stocks and earnings stories.  This morning saw retailer Michael Kors Holdings Limited (KORS) release quarterly earnings besting expectations and sending the stock higher by nearly 19%. We are currently long the KORS Feb 7^th weekly 83-84 call spreads that appear to be going to full value. More upscale retailers are reporting tomorrow with Ralph Lauren Corporation (RL), and The Estee Lauder Companies Inc. (EL) scheduled to release quarterly earnings results before the open tomorrow. We will examine these names into the close as luxury and upper scale retailers have been doing well for us.

Furiex Pharmaceuticals, Inc (FURX) is a drug development company with several programs in development.  The company’s stock is currently trading around $111.95 and is up more than 140% in today’s trading session.  The stock has more than doubled today on news that two drugs they had in Phase III trials came in line with both FDA and EMA guidelines. This move in the stock was telegraphed somewhat by an unusual options trade we flagged on January 22^nd. On Jan 22^nd we flagged a buyer of 1,000 Feb 50 Calls for $7.50. This trader had to lay out $750,000 in capital to put this trade on. Today these calls are trading around $65.00. This means that this trader profited over $5.7 million on this trade. This is a huge return and a shining example of how unusual option activity can help us find homeruns like this. We also flagged activity in FURX back in December and featured it in our Covered Call Newsletter when stock was trading near $41.00. That trade netted an annualized return of 154%. This trade was also based on unusual option activity.

U.S. equity markets accelerated their sell off today after January ISM numbers came in much worse than expected. The number came in at the lowest levels in eight months sparking acceleration to the sell off and sending E-mini S&P 500 futures lower by over 40 points by the close. We also saw a huge bid higher in the VIX with the index closing at 21.44, up over 16%. Gold markets also responded to the selloff in equities and rallied $17.00. Tomorrow will see the release of more manufacturing data with Factory Orders set to be released at 10am ET. After today’s price action eyes will surely be on the release of the Employment Situation this Friday as traders continue to struggle to find direction in this market.  We continued to move to cash today and will continue to look for stocks that may have been oversold in the past 2 weeks. As far as earnings plays we shorted YUM via options and got long KORS. Neither company has released their results yet so whether or not these trades are successful remains to be seen.