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Showing posts from October, 2010

First Business Chart Talk

Dan comments on the upward pressure on the VIX as the market moves through the third week of earnings. A full 35% of the S&P 500 components report earnings this week. The market has shown the ability to make measured strides higher over the past two months. Short term the VIX indicates that uncertainty in the market is contained, however looking at the term-structure of the VIX futures there is an indicatiion of increased volatility as we move into next year.



YHOO and AAPL Option play

Brian Stutland, contributor to CNBC's Options Action shown on Fridays, recommends to sell the AAPL Nov 320 call and buy the 280 put with long stocks to protect the recent gain through earning and the election.

Brian's play on AAPL Earning

Brian observes the option market is betting YHOO to be around 20 by Jan 2011, however, due to the uncertain of the outcome, Brian suggests to buy a put spread if you own the stock.

Brian's play on YHOO and AOL rumor

VIX Below 20

The market continues to push higher and the VIX has dropped below 20. Dan is seeing increased demand for less expensive volatility protection as the market continues to push higher. Dan expects the VIX to hold firm as we begin earnings season. INTC earnings should have an impact on market direction.

Tasty Tech Option Play

Brian Stutland, contributor to CNBC's Options Action shown on Fridays, analyzes the trading volume pattern of the past four months. He recommends to Yum Tech Option play for the coming earning season.
YUM is a little lofty, but with the depreciation of dollar and its footprint in China, Brian is still bullish and recommends a risk reversal play-buy the Nov 50 call and sell the Nov 45 put, collecting 10 cents.

Brian on CNBC Final Call-Tasty YUM

Brian will like to sell the SNY put to play with SNY's LBO of GENZ rumor,taking advantage of his bullish view on SNY and the elevated skew level.
Brian on CNBC Options Action

Want to know what's the expected move for AAPL,AMZN,GOOG,QCOM for their earning by the option markets? Check out this video:

Brian on Tech Earning

S&P 500 Breaks 1150

Dan discusses the technical breakout to the upside in the S&P 500. After a couple of weeks of consolidation the market has now jumped to new highs from the August lows. Dan is seeing cautious optimism; he notes that there are active put buyers in the S&P 500 and call buyers in the VIX. This translates into an increased appetite for risk protection.

S&P 500 holds around 1150

Market crossed S&P 500 1150 and turned around on Sep 30th, money managers are cautious at this point but the uptrend is intact and the reveral might be short term.

Market holds around 1150 during the past few days, there are out of the money call buying in Oct and Nov but generally speaking it is quietly in the VIX pit.

On Oct 5th, market reverses the drop after Japan cut its benchmark interest rate and Australia unexpectedly kept its key rate unchanged for the fifth straight month.


Dan on CNBC Pre-Market Buzz


Dan on First Business Chart Talk


Dan on CBOE In the Money with Angela Miles

Options Action in emerging market currencies

Benchmark borrowing costs of 10.75 percent in Brazil, 6 percent in South Africa and 6.5 percent in Indonesia" (bloomberg) are causing investors to flee the dollar in search of higher yields. Thus, the lack of PUT buying on these currencies may indicate that emerging country currencies have some room to move to the upside. With investors selling their dollars to buy other currencies, it actually may mean that investors are willing to take on risk, a positive for the stock market. Although it is counter-intuitive that money flowing out of the US is a good thing, it is beneficial to many companies with international exposure and exposure to commodities. Thus, the combination of physchological risk taking appetite and the fact that the S&P is made up of companies with such exposure mentioned may actually push the S&P 500 back to the 1200 level.

Sell UUP calls to be willing to be short the dollar at higher levels. (Feel free to revisit my buy UUP Oct 24 puts for .60. I o…

Market View

Market looks weak after a unexpected low number of consumer confidence index and then rallys to the close. Technically if S&P500 break above 1150, market will have a good chance to reach 1200. Emerging market trends higher such as EEM and EWZ. Market prices in that Republican Party will taker over and government will have further quantitative easing. Investors should be cautious that any shift in reality will trigger a sell off.



First Business Chart Talk