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With magnets of great interest at 1150 and 1175, bulls and bears find opposites don’t necessarily attract in Thursday’s very quiet first half. As of 11:00 ET the SPY (SPY) is flat and caught in the middle at 1166 much to the chagrin of some option jockeys anxiously hoping for a bit more.

There’s just one day left until the well-traded and still well-involved March SP-500 contract comes off the board. But for the time being and despite or maybe because of massive open interest above and below current cash levels, both premium bulls and bears must feel like expiration has come early.

One or two well-placed programs of course, could always change what’s shaping up as a classically tight inside doji decision day. Given a VIX flirting with 16% and stretchy-enough confidence or complacency, “Buy, Buy, Buy!” protection rather than chasing alongside flat-footed money managers purportedly in need of keeping up with the Jones’ into the end of the quarter, according to one Fast Money pitch last night, might make a bit more sense and “cents” all things considered.

Back to our regularly scheduled program, in Thursday’s anything but hard-hitting market “drivers”, there have been a handful of well-anticipated economic reports sporting mostly decent data but failing thus far to inspire bulls into further motion. Headlining, CPI data for February saw a one-tenth of a percent beat with its headline 0.00% reading, while an increase of 0.1% in core levels was in-line with analyst forecasts.

Separately, weekly claims of 457,000 came in ever-so-slightly above estimates of 455,000. Ever-difficult to evaluate continuing claims data, due to the severity of the recession and jobless benefits time constraints, rose by 10,000 to 4.58M and above estimates of 4.52M.

Intraday, a second report this week on regional manufacturing from the Philly Fed saw a reading of 18.9 and slightly above consensus views of 18.0. Crossing the tape in tandem, leading indicators matched estimates with its increase of 0.1%.

On the corporate front, earnings news has been ultra light, but one driver (and not a 9-Iron) for bulls has been a nice “swoosh” higher from Nike (NKE), the world’s largest athletic apparel and gear manufacturer. The company managed to post profits of $1.01 versus views of $0.89 on better-than-expected sales growth of 6.6% on revenues of $4.7B despite facing a major financial sand trap of sorts with Tiger Woods.

Shares of NKE are up 6.00% to fresh all-time highs with help from analysts at both FBR and Credit Suisse which raised price targets to $84 - $85 with catalysts such as a V-shaped recovery in China, accelerating future orders and the World Cup this summer acting as support for Nike shares to move higher.

Separately, economic bellwether FedEx (FDX) has taken off after an early morning technical grounding. The company posted a four cent profit beat of $0.76 per share and representing earnings growth of 145% from the year ago period when market conditions were at their nadir.

Additionally and supportive of bulls “current” efforts in shares of FDX to make good on a triggered cup with handle base or inverse H & S for some like-minded bulls; the air and ground shipping giant bested sales estimates by $330M on revenues of $8.70B and raised its full year 2010 EPS guidance above consensus views of $3.64 with a bracketing but bullish range of $3.60 - $3.80 per share.

Finally, while there’s always a bull market somewhere, some are long in the tooth while others might be appreciated for just getting underway, maybe. Shares of Qualcomm (QCOM) are trading up 2.25% after receiving a bullish plug from Barron’s Online. The article suggests that the company’s late January technical bludgeoning due to its missed company-provided forecast “creates a compelling opportunity for patient investors.”

Technically speaking and addressed a couple weeks back, this market strategist couldn’t agree more with Barron’s take on Qualcomm based on today’s lateral breakout confirmation for an even larger eight-month long broadening triangle pattern which found loose support off its 62% retracement level.

In those sometimes accurate heat-seeking option markets, premiums are considered fair, particularly if traders look towards the July or October contracts which trade under current longer-term statistical volatility, only slightly above “pre-fallout” SV levels and “fit” the described pattern to a decent degree.

As for more than a few of today’s other bulls, April calls are finding the most interest by a wide margin, outside mostly “closing” March 40 activity. Unusually heavy concentrations can be found in the at-the-money 40s, 41s and 42 calls where more than 8,000 of each contract have traded.

Chris Tyler
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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The information offered here is based upon Christopher Tyler’s observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual. 

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