Midday Action: October 30
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October 30, 2009
Bulls go "BOOyah!" following Thursday's bargain hunting treat compliments of a scary looking dollar and more of the same ol', same ol' elsewhere. As of 11:00 ET the SP-500 (SPY) is off 0.64% as bulls reach for profits inside yesterday's glad bag of tricks.
Thank god it never gets old. Stale but apparent eyebrow raising catalysts have given bulls' sufficient reasons to hand back a chunk of Thursday's delicious and celebrated financial goodies. A bid in the US Dollar (UUP), up 0.48% intraday, is once more spooking bulls with its strength and spearheading for Friday's lil' price schnitzel in the broader market.
The bid or carry / fund trade unwind in the Greenback raises the specter bulls noshing on candy-like green shoots are likely to find something more insidious baked in to those goods. Investors donning the bull suits shouldn't totally fear this Halloween Eve though. The Invisible Hand does have an agenda to support the SP-500 (SPY) above the very nearby level of 105.59 for window dressing purposes.
On the officially-sanctioned economic docket, income and spending data matched Street views. The former came in flat for September versus last month's 0.1% increase, while spending fell 0.5% from an upwardly revised 1.4% government assisted jump for the month of August. Separately, former cheers from the crowd out of Michigan are showing some signs of jeers as sentiment beat views with a reading of 70.6, but falling from September's more spirited 73.5.
"Trick or treat?" In corporate confessionals, investors are dressing up like bears in NASDAQ 100 and semiconductor equipment linchpin KLA-Tencor (KLAC). Shares are being clawed lower by 3.15% despite the company beating by $0.13, eclipsing sales views and guiding Q2 above Street views with an EPS range of $0.24 - $0.30 versus consensus estimates of $0.12. The action finds KLAC below its weekly pivot lows of the past couple months, as well as confirming its "sell-e-brated" and overhead 50-SMA. "BOOyah!"
In that sometimes accurate heat-seeking option action, bulls are out by more than a two-to-one margin in Human Genome (HGSI) with investor demand for net protection pricing in a binary style stock move. Shares are currently flat or up by about 0.15 at 20.10 for nitpicking bean counter types in front of an expected drug announcement over the weekend or before the US market opens on Monday.
Implieds for the ATM contract remain well-bid at 240%, while Friday's most active November 25 call contract fetches about 200% IV or $2.18 on volume of nearly 14,000. More thoughts from this corner can be found this evening at Investors.com, where I go head to head on position strategizing with analysts at JP Morgan.
Finally, heading into the lunchtime nosh and the market's goblins have spooked the living you know what out of Thursday's bargain hunters. All those prior treats and bullish relief have been laid to rest despite the Greenback actually weakening intraday. Apparently nobody informed the Invisible Hand about traders' most closely-watched market moving toy of the moment.
According to Reuters, "Wall Street Stumbles After Strong Rally" is to blame for the SP-500's inability to hold onto gains for the month of October. As much, the market proxy is now toying with the 105 level and about 0.50% below the "mission accomplished" point for those bulls dressed in paper profits.
Chris Tyler
Senior Staff Writer & Options Strategist
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