Paper buys 2,000 DE Jun 85 Puts for $0.68 (4.3 times usual volume) with stock at $90.18Paper buys 800 SIRI Jun 3.5 Calls $0.14 (2.4 times usual volume) with stock at $3.53
Paper buys 9,975 MNKD Jan 5 Calls for $1.35 (3.9 times usual volume) with stock at $5.06
Paper sold 1,300 ATVI Jan 17 Calls for $0.65 (2.4 times usual volume) with stock at $15.02
Paper sold 1,400 YOKU Sep 20 Puts for $1.85 (4.6 times usual volume) with stock at $21.41
DE reaffirmed EPS guidance, but lowered its estimates for equipment sales growth from 6% to 5%. Despite the bearish outlook, the company did put up very impressive YoY numbers…revenues were up 9% YoY for example.
Further breaking down the outlook into different regions, the company was overall rather bullish of China. They indicated that China’s subsidies are expected to help DE, but, on the other hand, the Avian flu seems to be having an adverse effect on feed demand. The company expects the Indian tractor market to remain soft, but they also indicated that the recent efforts from the central bank were bullish.
The company is expecting $3.4 B in cash flow from operations this year. Additionally, the company is expecting Q3 2013 to have net sales up 3% YoY and for net sales of fiscal 2013 to be up 5% compared to 2012.
The options market was expecting a $3.00 move yesterday according to the ATM May straddle. These options only have this week left to trade, so they were an organic indicator to derive market expectations from. The actual move was just above this implied move.
From the prospective of technical analysis, DE has imminent support from its 100 DMA at $89 along with prior high support.
Paper bought 1,700 TSLA Jan 48 Calls for $41.80 (2.6 times usual volume) with stock at $89.67
Paper bought 1,330 SCHW Jun 18 Puts for $0.40 (4 times usual volume) with stock at $18.52
Paper bought 1,700 TSLA Jan 48 Calls for $41.80 (2.6 times usual volume) with stock at $89.67The Spearman Study is a lower oscillating indicator that ranges from -100 to 100. This figure is really a correlation coefficient used to determine oversold and overbought conditions in a particular market. The coefficient is the correlation between the historic list of prices and a sorted list of the same prices. More importantly to the trading community however, the zero line is considered the trigger point when a trade could be put on.
The settings of this study are up to the discretion of the individual trader but normally the correlation coefficient is over a 10-day period, paired with a 3 period SMA. The 3 period SMA is used for a relative value in order to determine a if a turning point is upon us in the coefficient. Moreover, the relative state of being overbought or oversold is normally a value of plus or minus 80, but again this value is not set in stone.
The two charts below include the new study with the SPX. Courtesy of Bloomberg and Thinkorswim.
Fundamentals tend to drive the market in the long run, but trading and the short-term future of the stock market tend to be a function of emotion and shortsighted thought. The Spearman Study is another great indicator one can glance at to gain prospective of perhaps a turn in the market.
