Well the market did what it does, and I think caught a lot of people off guard with this massive 4 point drop today I mean some of the things I read today you would have thought we were down 40 handles today. Certainly, I did tweet out in the morning I went to all cash, and I did, but with that being said I didn’t take the cash and go buy a bunker in my back yard because the world was ending. I am just choosing to stick with day trades for a bit unless there is something very exciting on the horizon. With all that said, i give you my comedy sketch and some interesting set-ups.
|Mass Panic on the morning failed break out and move down 6 handles.|
|Dont Panic it only 6 handles after a 150 point rally.|
|Things Will Be Okay!|
Only right to begin with a short idea, INTU after a massive run shares have been breaking down and a gap down on Monday which held the 10 day and bounced today again were slightly red and hanging on tot he 10 day, wound up closing below by a few pennies. Today saw 3,000 April 65 puts trade in and around the .90-1 range. If we see some market weakness this could be a name to target as it could certainly make a quick move down to the 20/50 day moving average and would create a nice trade with these 65 puts.
HWD caught my attention as trading 10X daily call volume and shares breaking out to new highs here a trader stepped in for 2200 April 17.50 calls at .25, there are also 2,000 May 15 calls in open interest. Certainly eye grabbing for a name that does not really trade options too much, and has the possibility to make a run to the 2011 highs in the 18-18.25 range. It is a more speculative play, but could interesting through 17 or to speculate a bit more and jump into them now for a quarter.
EMC been seeing a lot of accumulation in longer dated calls, but has become a name I have learned to not trust the options flow in at least on a shorter term basis, but shares are beginning to look more attractive as they break out of this down trend and make a run at the 200 day, and I mentioned on Twitter/Stocktwits it could be an attractive synthetic long here through 25 going out to Jan 2014, not really my thing to go out that far, but certainly interested. 25,000 Jan 2014 25 calls went off today, against 58,000 in OI so have to check that tomorrow. Also saw some activity in VMW, which I will highlight later maybe some news about the two is coming.
NKE with a gap down today and ended the day battling the 50 day, I am not too sure if there was news in the name today, but it broke the 2013 up trend as well so certainly some damage done, but 9,000 April 55 calls were picked up today against 5K OI so will check it out tomorrow to see how many of the 9,000 turned into holds. Earnings are the 21st of March so positioning for that event, it’s a bit more speculative to me and not something I would enter here, but one to watch tomorrow for a day trade if it rips back through the 50 day. Looking at NKE got that gap to fill to around the 50 area and the 200 day at 49.50 so with that solid support in mind the 55/50 bull risk reversal for about .30 could be a way to play it, but I am never a fan of being naked into earnings.
LTD shares seem to be treading water and look destined to test the 20 and 200 day here if the market weakens and possibly without that catalyst and then the 42 area comes into play. Today saw 1900 April 43 puts & 1100 Aug 44 puts go off so some interesting plays there expecting shares to break down short-term and longer term. We got retail sales coming up here this week I believe and I am not too sure if LTD reports anything anymore but something to keep an eye on for a trade through the 200 day.
NWSA options bulls have been pounding the table on this one and being well paid for doing so as shares have been on a great run and today was no different. Saw 11,000 March 28 calls rolled into April 28 calls, what appears to be a 20,000 by 40,000 ratio call spread with july 30 by 32 calls for a free trade here. Certainly a name on the wish list on any pull backs as there are also about 170,000 calls in OI in Jan 2014. That July ratio spread is definitely interesting.
VMW saw 3,000 April 80 calls bought today (confirm with OI check tomorrow)… Since the earnings shelling I have seen traders step in a bunch of time speculating on the bottom and I have blogged about it and mentioned it will be better off to wait for a cleaner set up, and I feel the same way here I am not going to pick the bottom and want to see some committment and probably even a gap entry sort of play. With this action and the EMC action there could certainly be a catalyst I am not aware of.
WMT I mentioned the April 75 calls a ways back around .15 they’re now about .50 and more were being bought up today to the tune of 5,000 (confirm OI). So I closed these calls out today, but it does look great and will be a name I look to for day trades, but at the moment not interested in holding a book.
I really like CF here although it is not the cleanest of charts, but it does look good through yesterdays high around 208.60 for a move to the 50 day, and I like this one as there is very easy places to get out here through the 200 day or the 10 day, which I expect to cross the 200 day shortly. So again one I will be watching for some momentum tomorrow and the days to follow.
SLM is another name I mentioned a while back and I got rid of my calls today, but shares look great here and seemed unphased by what the market was doing, and I like this one through the 19.80-20 area. Of note with me a lot of others seemed to be dumping their calls in the July 19 & 20′s as IV dropped a bit and a lot of the trades were around the bid so that’s a bit of caution (check OI) but still sets up well for some day trading.
Thats all I got for now, will post some charts on Twitter/StockTwits later. Also, sorry about the non working links and posting yesterdays a million times, i will try to get this one right the first time.