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Options expiration Friday off to a bearish start as dollar continues its ascent. Foreign markets are lower as well with Asian and European indices following the lead of the U.S. Tech stocks continue to suffer losses this morning, led by Dell (DELL), which reported disappointing earnings. On Thursday, shares fell on weakness in chip stocks and a flight to the relative safeness of the dollar and bonds. Despite the fact it is options expiration week, volumes have been light this week and this isn't likely to change given that the holiday season is upon us.

Dell shares are lower by more than 7 percent Friday after reporting disappointing earnings results. The computer maker made 23-cents a share, which were 5-cents below expectations. Revenues were down 14.9 percent and also missed estimates. Dell did say that they are seeing improvement in overall underlying IT demand. Dell shares are trading near $14.50 with a 52-week range from $7.84 and $17.26.

Ann Taylor (ANN) reported earnings, but the stock is struggling to trade positively. ANN beat estimates by 13-cents a share, but reported disappointing revenues. The most disappointing part of the company's comments was that fourth quarter sales were expected to be slightly below the third quarter. ANN shares are down more than one percent at a price of $13.60. However, the stock was trading below $2.50 earlier in the year.

Home builders are in the news Friday after DR Horton (DHI) reported disappointing earnings results. The company missed earnings estimates by 43-cents a share with revenues falling 34.6 percent. Net sales orders did increase, up 26 percent from the year ago period, but the company sees the homebuilding industry still challenging with foreclosures high and unemployment heavy. DHI is trading near $11.60 a share, a decline of more than 5 percent, but this stock has a 52-week low at $3.79.

Volumes have been very light this week, especially considering it is options expiration today. After such large moves to the upside since March, many traders are deciding sit back and enjoy the profits already made as we head into 2010. The bulls were hoping that the S&P 500 ($SPX) would close the week above 1,100, but unless we see a rally to end Friday's session, this isn't going to be the case. This supports the view that the major market indices are likely to consolidate through the end of the year.

Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site

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