Papale on Thanksgiving Week

Say you’re a pilot.  Its dark out and you just get clearance from your destination airport you are cleared to land.  You take it down and land safely.  No problem.  You notice however the runway seems a little shorter than you remember.  Then the snack bar is not where it was last time…a few weeks ago.  In fact the whole airport looks different.  Seem like an episode from “The Twilight Zone”?

Nope.  It happened last night in Wichita, KS.  A modified 747 landed safely at Jabara Airport in Wichita.  Only problem is it was supposed to land at McConnell Air Force Base, about 10 miles away.   Could happen to anyone I guess.  Those airports all look the same from 10,000 feet at night.

Next week is Thanksgiving.  For traders that means a shortened week for the markets and lower liquidity as participants start to think more about turkey than trading.  The main impact for options traders is the prospect of historically listless markets and quickly decaying options.  For the option seller, this is good news of course.  However,  keep in mind as the week moves on, there will be fewer and fewer participants which means less liquidity.  This lower liquidity can lead to larger than normal moves  should a market moving event take place.  A negative gamma, the risk to the positive theta position, can wreak havoc on a position quickly in that environment.

So how do we play it?  Pretty much the same as always.  Mind your risk and make adjustments as determined ahead of time in the trading plan.  Most of the time, markets do in fact favor the options seller on holiday weeks.  But every so often it can move sharply so be ready.

Finally, let me take this opportunity to wish everyone a safe and blessed Thanksgiving holiday.

The Prepared Mind: November 18, 2013

“Chance favors the prepared mind.” — Louis Pasteur

The worldwide bull market continued with the S&P 500 achieving a new all-time high for the 36th time and for the third consecutive week.  The SPY was pinned at 180 for the November expiration. Joining the SPX and DJIA in setting new highs were the S&P 100 (OEX) and the NASDAQ 100 (NDX) which was up 1.66% and over 3,400 for the first time.  The Russell 2000 (RUT) was the only major index which did not set a new high.  The gains of the RUT have lagged the percentage gains of the other indexes.  Analysts have pointed to the earnings multiples of the RUT as the reason for the performance disconnect between it and other indexes.  The multiple of 20 is regarded as fully valued or even an extended valuation.  .  This has led to a number of advisors recommending rotation from the small caps to larger caps or international markets.

The market ended a week of wild gyrations with only moderate moves.  Here is a capsule view of last week’s market numbers:

Index

Close

Weekly Change

% Weekly

% YTD

Volatility of  Index

Dow Jones Industrials (DJIA)

15,961.70

200.02

1.27%

21.81%

11.24% (VXD)

S&P 500 (SPX)

1,798.18

27.57

1.56%

26.08%

12.19% (VIX)

NASDAQ 100 (NDX)

3,422.58

55.74

1.66%

28.62%

13.13% (VXN)

Russell 2000 (RUT)

1,114.09

16.07

1.46%

28.96%

15.85% (RVX)

S&P 100 (OEX)

802.10

11.07

1.40%

24.05%

11.41% (VXO)

CBOE Volatility Index (VIX)

12.19

-0.71

-5.50%

NA

 

 

This coming week the focus will be on retail sales and housing. Retail sales are viewed by many as a surrogate indicator for consumer confidence and the overall strength of the economy.  In addition, this release will be viewed as a precursor of the all-important Holiday sales.  The housing numbers will be an additional indicator of the state of the current economy.   Normally, the release of FOMC minutes would be the primary focus of  the investment and trading communities.  Janet Yellen’s testimony before Congress last week allayed much of the concern about the timing and breadth of the tapering of bond buying by the Fed.  Yellen indicated there would be no near term changes in the monthly purchases of bonds.  Assurances of a continuation of  quantitative easing fueled last week’s rally.

Earnings are becoming more important as analysts are starting to focus on earnings multiples.  The price/earnings ratio is becoming more important as the bull market continues.    All eyes will be on earnings for Best Buy (BBY), Home Depot (HD), and Lowes (LOW.)  These earnings and the accompanying conference call will be gleaned for hints as to consumer sentiment, housing, and the state of the economy  I use the following criteria:  Price > 20, 30 Day Implied Volatility > 20, and Average Daily Option Volume > 200 contracts.  It is your responsibility to confirm the earnings dates. They can and do change.  You will notice that a stock may move in one direction on the earnings announcement and then move in the opposite direction during the conference call.  Be aware of the earnings date for any equity options you may trade.

Trading advice to remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

“Stock market bubbles don’t grow out of thin air. They have a solid basis in

reality, but reality as distorted by a misconception.” – George Soros

Monday November 18:

Economic:  Treasury International Capital – 9:00 Am, Housing Market Index – 10:00, E-Commerce Retail Sales – 10:00.

International Economic:  Italy Industrial Production 4:00 AM.

Other:  Boston Federal Reserve Bank President Eric Rosengren speech on financial supervision in Abu Dhabi – 1:00AM, New York Federal Reserve Bank President William Dudley speech on regional and national economy, in Flushing, NY – 12:15 PM, Philadelphia Federal Reserve Bank President Charles Plosser speech on the economic outlook in Philadelphia – 1:30 PM, Minneapolis Federal Reserve Bank President Narayana Kocherlakota speech on TBTF in Minneapolis – PM.

Optionable Earnings:

Symbol

Company Name

November 15 Close

IV30

B/A

XEPS

JKS JinkoSolar Holding Co., Ltd.

$29.24

89.1

B

$0.35

TSN Tyson Foods, Inc.

$28.63

27.6

B

$0.69

JEC Jacobs Engineering Group Inc

$63.45

22.2

A

$0.87

NOAH Noah Holdings Limited (ADR)

$22.41

80.5

A

$0.25

CRM salesforce.com, inc.

$56.99

44.3

A

($0.04)

URBN Urban Outfitters, Inc.

$40.00

35.5

A

$0.45

 

Tuesday November 19:

Economic:  ICSC-Goldman Store Sales – 7:45, Employment Cost Index – 8:30, Redbook – 8:55.

International Economic:  Germany, Italy, and Great Britain CPI – 4:30 AM, Japan Machine Orders- 6:50 PM.

Other:  Chicago Federal Reserve Bank President Charles Evans speech on the economy and monetary policy in Chicago – 2:15, Federal Reserve Chairman Ben Bernanke speech in Washington to the Washington chapter of the NABE – 7 PM.

Optionable Earnings:

Symbol

Company Name

November 15 Close

IV30

B/A

XEPS

BBY Best Buy Co., Inc.

$43.33

45.1

B

$0.11

DKS Dicks Sporting Goods Inc

$55.61

33.6

B

$0.39

HD The Home Depot, Inc.

$78.94

21.3

B

$0.89

TJX The TJX Companies, Inc.

$63.01

20.9

B

$0.74

SQM Sociedad Quimica y Minera de Chile (ADR)

$26.89

36.8

A

$0.51

 

Wednesday November 20:

Economic:  MBA Purchase Applications – 7:00, Consumer Price Index – 1:30, Retail Sales – 8:30, Business Inventories – 10:00, Existing Home Sales – 10:00, EIA Petroleum Status Report – 10:30, FOMC Minutes – 2:00.

International Economic:  EMU Industrial Production _ 5:00 AM, Japan GDP – 6:50 PM.

Other:  New York Federal Reserve Bank President William Dudley press conference on regional and national economy in New York – 10:00, St Louis Federal Reserve Bank President James Bullard interview on the economy and monetary policy in Chicago – 12:10.

Optionable Earnings: 

Symbol

Company Name

November 15 Close

IV30

B/A

XEPS

ADT ADT Corp

$43.37

29.2

B

$0.46

DE Deere & Company

$82.85

20.1

B

$1.89

LOW Lowe’s Companies, Inc.

$51.95

26.3

B

$0.48

SJM The J.M. Smucker Company

$108.93

22.1

B

$1.59

GMCR Green Mountain Coffee Roasters Inc.

$60.63

64.2

A

$0.75

LTD L Brands Inc

$64.83

23.7

A

$0.28

WSM Williams-Sonoma, Inc.

$56.21

29.4

A

$0.54

 

Thursday November 21:

Economic:    Jobless Claims – 8:30Producer Price Index (PPI) – 8:30, PMI Manufacturing Index Flash – 8:58,  Bloomberg Consumer Comfort Index – 9:45, Philadelphia Fed Survey – 10:00, EIA Natural Gas Report – 10:30, EIA Petroleum Status Report – 11:00.

International Economic:  China Producer and Import Price Index – 3:15 AM, EMU GDP Flash – 5:00 AM.

Other:  St Louis Federal Reserve Bank President James Bullard speech on the economy and monetary policy in Rogers, Arkansas – 8:00 AM.

Optionable Earnings: 

Symbol

Company Name

November 15 Close

IV30

B/A

XEPS

ANF Abercrombie & Fitch Co.

$35.16

41.8

B

$0.44

CYBX Cyberonics, Inc.

$59.63

37.1

B

$0.49

DLTR Dollar Tree, Inc.

$59.81

24.0

B

$0.60

GME GameStop Corp.

$57.43

50.4

B

$0.58

LQDT Liquidity Services, Inc.

$27.96

55.1

B

$0.41

SPB Spectrum Brands Holdings, Inc.

$65.35

25.0

B

$0.85

BKE The Buckle, Inc.

$52.05

33.4

B

$0.90

ADSK Autodesk, Inc.

$44.13

36.1

A

$0.27

BERY Berry Plastics Group Inc

$20.75

37.6

A

$0.24

INTU Intuit Inc.

$73.16

20.3

A

($0.20)

P Pandora Media Inc

$29.47

67.9

A

$0.01

ROST Ross Stores, Inc.

$81.09

22.6

A

$0.80

SPLK Splunk Inc

$62.55

52.5

A

($0.12)

TFM The Fresh Market Inc

$50.82

49.7

A

$0.26

GPS The Gap Inc.

$42.05

27.3

A

$0.71

 

Friday November 22:

Economic: JOLTS – 10:00, Kansas City Fed Manufacturing – 11:00.

International Economic: EMU HICP (Inflation Index) – 5:00 AM.

Other: Kansas City Federal Reserve Bank President Esther George speech on bank supervision at Bank of France conference in Paris – 8:40 AM, Federal Reserve Gov. Daniel Tarullo speech on shadow banking to Economic Policy Institute in Washington – 12:15.

Optionable Earnings: 

Symbol

Company Name

November 15 Close

IV30

B/A

XEPS

ANN Ann Inc

$36.61

35.4

B

$0.87

FL Foot Locker, Inc.

$37.13

28.0

B

$0.66

PETM PetSmart, Inc.

$73.32

23.5

B

$0.86

 

Monday November 18:

Economic:  Pending Homes Sales Index – 10:00, Dallas Fed Manufacturing Survey – 10:30.

International Economic:  Bank of Japan Minutes – 6:50 PM. .

Optionable Earnings:   

Symbol

Company Name

November 15 Close

IV30

B/A

XEPS

QIHU Qihoo 360 Technology Co Ltd

$87.90

65.2

B

$0.26

SDRL Seadrill Ltd

$45.83

23.0

B

$0.67

PANW Palo Alto Networks Inc

$42.20

56.7

A

($0.03)

WDAY Workday Inc

$74.20

41.2

A

($0.26)

 

 

Papale on Dividends and Expiration

It snowed the other night here in the Chicago area.  I was nice to watch.  The first snow of the year.  Unfortunately, it covered all the leaves that still need to be raked on the yard.  So I thought to myself I should tell my boys to get out there and shovel the driveway.  And when they’re done they need to rake the yard.  Not sure we have ever had that double duty yard work before but this would have been interesting.  As it turned out there was not enough snow to shovel so they just had leaves to rake.  But I must admit it would have been fun to watch.

It’s the end of the expiration month and front month options are being exercised and assigned.  Most of the time options will be exercised on the night the option expires automatically by the clearing firm.  However, there will be a sprinkling of long option holders who exercise a day or so ahead of expiration day if the option is well in the money.  The other occasion someone might exercise ahead of expiration day is to capture a dividend.  Since being long a call does not entitle the holder to the dividend, he might exercise his call just before dividend is paid and take the stock.  While anyone can exercise their option whenever they want, the economic rationale for exercise is pretty straightforward.

Generally, if the dividend is greater than the extrinsic value remaining in the in the money option, than the exercise is worth it.  For example, if my in the money call has $.40 of extrinsic value and the dividend is $.35, than generally I would not exercise.  Remember, when we exercise a call we buy the stock at the strike price and lose all remaining extrinsic value.  So watch your calls when getting close to ex dividend date.  Most of the time you can predict what will happen.

The Prepared Mind: November 11, 2013

Numerous pop culture touchstones go through my mind as I try to describe  this market’s behavior.  The market reminds me of Groundhog Day.  It seems like I am living the same market over and over again.   It just keeps going higher. Every pullback is a buying opportunity (until they are not.)

This market and any other one direction market are a trader’s worst dream.  Success is not predicated by knowledge or understanding of the market, fundamental or technical analysis, or finely tuned trading discipline.

There is an entire cottage industry based on selling the secrets of the “marketmaker” or the “professional trader.”  These are the secrets that we will not share with you.  My inbox is under a daily assault from these sellers of the golden goose.  All you have to do is sell puts on “value stocks” and “undervalued stocks.”  This is a strategy which works in any one way up market and can bankrupt you in any correction or black swan of substance.  I traded the Crash of 1987.  A popular mantra for one of the busiest stocks was “Sell the 180’s and buy a Mercedes.”  The net result for those who followed this guidance was after selling the 180 puts and they ended up by selling the Mercedes, the house, the seat on the exchange, and every other liquid assets.

Understand that rewards do not occur without risk in any environment.  Be disciplined and understand your positions. Know in advance your trading response to adverse market moves.  The market movement this past week was characterized by wild swings seemingly designed to elicit panicked moves from traders.   A prepared mind will reduce the likelihood of an unprepared or panicked response.

The market ended a week of wild gyrations with only moderate moves.  Here is a capsule view of last week’s market numbers:

Index

Close

Weekly Change

% Weekly

% YTD

Volatility of  Index

Dow Jones Industrials (DJIA)

15,761.68

146.13

0.94%

20.28%

12.33% (VXD)

S&P 500 (SPX)

1,770.61

8.97

0.51%

24.15%

12.90% (VIX)

NASDAQ 100 (NDX)

3,366.84

-12.92

-0.38%

26.53%

14.47% (VXN)

Russell 2000 (RUT)

1,098.02

4.66

0.43%

28.42%

17.41% (RVX)

S&P 100 (OEX)

791.03

5.42

0.69%

22.33%

12.75% (VXO)

CBOE Volatility Index (VIX)

12.90

-0.38

-2.86%

NA

 

The highlight of the week will be options expiration on Friday.  The last day for trading on options for the SPX will be on Thursday.  It is a quiet week for domestic and international economic reports.  Earnings announcements for the third quarter are tapering.  The week only 50 stocks met the criteria for my earnings scan.    The scans for the previous three weeks have each exceeded 250 stocks.   Earnings have generally met or exceeded “whisper numbers.”  Most misses have been minor in nature have not rippled through the market.

Every week I scan stocks announcing earnings the coming week. This week the scan produced nearly 250 stocks meeting robust criteria indicating liquid option markets.  I use the following criteria:  Price > 20, 30 Day Implied Volatility > 20, and Average Daily Option Volume > 200 contracts.  It is your responsibility to confirm the earnings dates. They can and do change.  Continue to be wary of trading any products where there is not adequate liquidity and narrow enough markets.  Analysts and market mavens are looking at the quality of Q3 earnings and for direction from the associated earnings conference calls.   You will notice that a stock may move in one direction on the earnings announcement and then move in the opposite direction during the conference call.  Be aware of the earnings date for any equity options you may trade.

Trading advice to remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

“Stock market bubbles don’t grow out of thin air. They have a solid basis in

reality, but reality as distorted by a misconception.” – George Soros

Monday November 11:

U.S. HOLIDAY: Veteran’s Day – Markets Open, Banks Closed.

International Economic:  Italy Industrial Production – 4:00 AM.

Optionable Earnings:

Symbol

Company Name

November 8 Close

IV30

B/A

XEPS

ABFS Arkansas Best Corporation

$25.42

55.7

B

$0.37

CTB Cooper Tire & Rubber Co

$26.90

69.1

B

$0.54

SLW Silver Wheaton Corp. (USA)

$21.65

43.4

B

$0.23

AGO Assured Guaranty Ltd.

$20.75

36.5

A

$0.61

HOLX Hologic, Inc.

$22.16

33.1

A

$0.37

IOC InterOil Corporation (USA)

$66.50

60.7

A

($0.07)

NTI Northern Tier Energy LP

$23.35

27.3

A

$0.74

RAX Rackspace Hosting, Inc.

$47.68

56.9

A

$0.15

VIPS Vipshop Holdings Ltd – ADR

$70.71

78.2

A

$0.17

 

Tuesday November 12:

Economic:  NFIB Small Business Optimism Index – 7:30. ICSC-Goldman Store Sales – 7:45, Chicago Fed National Activity Index – 8:30, Redbook – 8:55.

International Economic:  German CPI 2:00 AM, Italy CPI 4:00 AM, Great Britain CPI & PPI – 4:30.

Other:  Dallas Federal Reserve Bank President Richard Fisher speech on monetary policy and growth in Melbourne, Australia -3:00 AM, Minneapolis Federal Reserve Bank President Narayana Kocherlakota speech on monetary policy strategy in St. Paul – 1:00PM, Atlanta Federal Reserve Bank President Dennis Lockhart speech on the economic outlook in Montgomery, Alabama – 1:50.

Optionable Earnings:

Symbol

Company Name

November 8 Close

IV30

B/A

XEPS

DISH DISH Network Corp

$48.20

34.9

B

$0.42

EVEP EV Energy Partners, L.P.

$35.94

30.4

B

$0.19

NRG NRG Energy Inc

$27.98

32.9

B

$0.82

NS NuStar Energy L.P.

$42.42

43.4

B

$0.27

NSH NuStar GP Holdings, LLC

$24.68

43.5

B

$0.33

ROC Rockwood Holdings, Inc.

$64.87

31.9

B

$0.48

SRPT Sarepta Therapeutics Inc

$34.59

79.0

B

($0.66)

MWE Markwest Energy Partners LP

$73.14

25.6

A

$0.25

MDVN Medivation Inc

$59.50

47.4

A

($0.28)

PBPB Potbelly Corp

$25.76

60.4

A

$0.09

SINA SINA Corp

$78.10

51.9

A

$0.17

 

Wednesday November 13:

Economic:  MBA Purchase Applications – 7:00, Atlanta Fed Business Inflation Expectations – 10:00 AM

International Economic:  EU Industrial Production – 5:00, Bank of England Inflation Report – 5:30, Japan GDP – 6:50 PM.

Other:  Federal Reserve Chairman Ben Bernanke town hall meeting with educators in Washington – 7:00 PM.

Optionable Earnings: 

Symbol

Company Name

November 8 Close

IV30

B/A

XEPS

CSCO Cisco Systems, Inc.

$23.11

25.5

A

$0.47

CSIQ Canadian Solar Inc.

$26.25

81.3

B

$0.60

DDS Dillard’s, Inc.

$82.63

38.1

B

$1.00

M Macy’s, Inc.

$45.96

29.3

B

$0.39

PF Pinnacle Foods Inc

$27.07

29.0

B

$0.34

XONE ExOne Co

$54.56

75.2

A

($0.02)

NTAP NetApp Inc.

$39.45

31.7

A

$0.48

NTES NetEase, Inc (ADR)

$64.08

42.3

A

$1.35

 

Thursday November 14:

Economic:   International Trade – 8:3-, Jobless Claims – 8:30, Productivity and Costs – 8:30, Bloomberg Consumer Comfort Index – 9:45, EIA Natural Gas Report – 10:30, EIA Petroleum Status Report – 11:00.

International Economic:  German GDP Flash – 2:00, French GDP Flash – 3:30 AM, EU GDP Flash – 5:00 am.

Other:  Last day of trading for November SPX options.

Optionable Earnings: 

Symbol

Company Name

November 8 Close

IV30

B/A

XEPS

A Agilent Technologies Inc.

$50.05

24.6

A

$0.76

HP Helmerich & Payne, Inc.

$75.67

25.4

B

$1.40

JWN Nordstrom, Inc.

$60.32

22.1

A

$0.66

KSS Kohl’s Corporation

$56.54

29.0

B

$0.86

MGAM Multimedia Games Holding Company Inc

$31.44

56.5

B

$0.26

PLCE Children’s Place Retail Stores, Inc.

$52.54

38.2

B

$1.86

TYC Tyco International Ltd.

$35.87

20.9

B

$0.53

VIAB Viacom, Inc.

$80.91

23.6

B

$1.44

YOKU Youku Tudou Inc (ADR)

$25.35

63.8

A

($0.06)

 

Friday November 15:

Economic: Empire State Manufacturing Survey – 8:30, Import and Export Prices – 8:30, Industrial Production – 9:15, Wholesale Trade – 10:00.

International Economic: No major reports.

Other: Options expiration

Optionable Earnings:  No earnings meeting the criteria.

Monday November 18:

Economic:  Treasury International Capital – 9:00, Housing Market Index – 10:00, E-Commerce Retail Sales – 10:00.

International Economic:  No major reports.

Other:  Philadelphia Federal Reserve Bank President Charles Plosser speech on the economic outlook in Philadelphia – 1:30, Minneapolis Federal Reserve Bank President Narayana Kocherlakota speech on TBTF in Minneapolis – 8:00.

Optionable Earnings:   

Symbol

Company Name

November 8 Close

IV30

B/A

XEPS

CRM salesforce.com, inc.

$54.35

42.6

A

($0.04)

JEC Jacobs Engineering Group Inc

$61.20

22.5

A

$0.87

JKS JinkoSolar Holding Co., Ltd.

$23.36

91.8

B

$0.35

TSN Tyson Foods, Inc.

$27.56

26.7

B

$0.69

UGI UGI Corp

$40.89

20.7

A

($0.10)

URBN Urban Outfitters, Inc.

$38.47

32.3

A

$0.45

 

 

 

Papale on Rho

Ah 1999.  I remember sitting around on New Year’s Eve waiting for Y2K to kick in and all the lights and computers to shut down or blow or maybe melt.  It was the year SpongeBob and The Sopranos premiered.  Bill Gates net worth exceeded $100mm.  IPO’s were everywhere – companies that made no money went public, doubled on the first day of trading and were valued at tens of billions.   Ah the good old days.  But better get back to work.  Need to check on Twitter.

The almost never spoken of member of the option Greek family is rho.  Rho measures the sensitivity of options to changes in interest rates.  In fact it shows how a 1% move in interest rates will affect the option price.  While rho is probably the least used option Greek, especially in our current low rate environment,  for some traders and in some environments, it is relevant.

For example, traders who trade longer dated options such as LEAPS may use rho to help hedge long term rate risk.  The longer the life of the option, the more likely a change in interest rates could occur and consequently having an effect on option prices.  While generally interest rates are fairly stable and predictable, that is not always the case.  In the fall of 2008, rates moved around quite dramatically.  In that environment the effect of the rate changes had an impact on not only the prices of longer term options, but the options  model itself.  So while in most cases for most traders, interest rates are thought of as rather benign, their effect can on occasion be quite significant.

The Prepared Mind: November 4, 2013

“Chance favors the prepared mind.” — Louis Pasteur

Indexes hit record highs on Tuesday.  The indexes backtracked for the rest of the week when the FOMC meeting announcement seemed to indicate tapering of QE@ could begin as early as next month.   This rally has been led by tech stocks and small caps.  The tech heavy NDX is up 27% for the year while the small cap laden Russell 2000 (RUT) is up over 31%.  After months of outperforming the market as a whole, both unperformed the larger market this week and for the month of October.  Analysts have voiced specific concerns about the RUT.  For the month of October the S&P 500(SPX) was up 4.63% while the RUT was up only 2.42%.  These analysts are veering in to the area where good news is bad news – “It was up, but it wasn’t up enough.”

There are plenty of cognoscenti who still believe the bull will continue into the foreseeable future tempered by sporadic pullbacks.  They do not see a full-fledged correction in their tea leaves.  They are recommending on buying on dips and defensive call writing to temper exposure to small pullbacks.  Every trader has a unique risk/reward comfort zone.  Respect your trading comfort zone and adjust your exposure to market vagaries appropriately.

Here is a capsule view of last week’s market numbers:

Index

Close

Weekly Change

% Weekly

% YTD

Volatility of  Index

Dow Jones Industrials (DJIA)

15,615.55

45.27

0.29%

19.17%

12.66% (VXD)

S&P 500 (SPX)

1,761.64

1.87

0.11%

23.52%

13.28% (VIX)

NASDAQ 100 (NDX)

3,379.76

-4.07

-0.12%

27.01%

14.76% (VXN)

Russell 2000 (RUT)

1,093.36

-23.33

-2.09%

31.16%

17.37% (RVX)

S&P 100 (OEX)

785.61

2.28

0.29%

21.50%

12.03% (VXO)

CBOE Volatility Index (VIX)

13.28

0.19

1.45%

NA

 

This will be a very busy week – earnings, employment, Q3 GDP, and numerous Fed officials speaking.  All of this will be autopsied in an attempt to predict easing of Fed bond buying and indications of current and future domestic growth   Twitter’s IPO on Wednesday is garnering the most media attention.  Traders are fixated on Thursday’s GDP announcement and Friday’s Employment Situation Report.   Both have the ability to move the market in either direction – up or down.

 

Earnings announcements for the third quarter continue at high levels.  Earnings have generally met or exceeded “whisper numbers.”  Most misses have been minor in nature have not rippled through the market.     OptionVue 7 now provides the earnings date and time for individual stocks on your main Quotes Display.  It is a separate column highlighting the date and time of individual earnings.  Earnings will continue have the potential to move individual stocks and the markets. Earnings include:  Andarko, Kellogg, CME Group, Marathon Oil, CVS/Caremark, Prudential Financial, Chesapeake Energy, Whole Foods, QUALCOMM, Duke Energy, Apache, Priceline.com and Disney,  I have compiled a more comprehensive list of earnings announcements below.

 

Every week I scan stocks announcing earnings the coming week. This week the scan produced nearly 250 stocks meeting robust criteria indicating liquid option markets.  I use the following criteria:  Price > 20, 30 Day Implied Volatility > 20, and Average Daily Option Volume > 200 contracts.  It is your responsibility to confirm the earnings dates. They can and do change.  Continue to be wary of trading any products where there is not adequate liquidity and narrow enough markets.  Analysts and market mavens are looking at the quality of Q3 earnings and for direction from the associated earnings conference calls.   You will notice that a stock may move in one direction on the earnings announcement and then move in the opposite direction during the conference call.  Be aware of the earnings date for any equity options you may trade.

Trading advice to remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

“Stock market bubbles don’t grow out of thin air. They have a solid basis in

reality, but reality as distorted by a misconception.” – George Soros

Monday November 4:

Economic:  Gallup US Consumer Spending Measure – 8:30, Factory Orders – 10:00, TD Ameritrade IMX – 12:30.

International Economic:  EU PMI Manufacturing – 4:00 AM, Japan PMI Composite – 6:15 PM, China PMI Composite – 8:45.

Other:  Federal Reserve Gov. Jerome Powell opening speech to San Francisco Fed’s Asia Economic Policy Conference, in San Francisco – 11:40, Boston Federal Reserve Bank President Eric Rosengren speech on the economic outlook in Boston – 4:00.

Optionable Earnings:

Symbol

Company Name

November 1 Close

IV30

B/A

XEPS

CME CME Group Inc

$74.21

23.7

B

$0.73

CST CST Brands Inc

$32.24

25.4

B

$0.51

IEP Icahn Enterprises LP

$101.70

35.9

B

$1.61

RLGY Realogy Holdings Corp

$41.14

53.0

B

$0.87

SYY SYSCO Corporation

$32.34

23.1

B

$0.48

VMC Vulcan Materials Company

$53.55

33.1

B

$0.25

APC Anadarko Petroleum Corporation

$95.29

31.8

A

$1.18

APL Atlas Pipeline Partners, L.P.

$38.56

22.4

A

$0.28

BSFT BroadSoft Inc

$32.72

79.3

A

($0.08)

CRZO Carrizo Oil & Gas, Inc.

$43.85

49.2

A

$0.73

CF CF Industries Holdings, Inc.

$215.60

29.5

A

$3.84

CHMT Chemtura Corp

$24.50

44.0

A

$0.22

CSOD Cornerstone OnDemand, Inc.

$47.37

53.2

A

($0.13)

DNB Dun & Bradstreet Corp

$108.79

29.4

A

$1.88

BGC General Cable Corporation

$32.93

45.1

A

$0.55

GIMO Gigamon Inc

$30.78

63.4

A

$0.05

GDP Goodrich Petroleum Corporation

$23.39

71.6

A

$0.69

HTZ Hertz Global Holdings, Inc.

$22.96

41.9

A

$0.71

MRO Marathon Oil Corporation

$35.26

25.1

A

$0.78

MR Mindray Medical International Ltd

$37.61

70.9

A

$0.45

NFX Newfield Exploration Co.

$30.45

40.0

A

$0.49

PXD Pioneer Natural Resources

$204.78

46.5

A

$1.34

PPO Polypore International, Inc.

$45.20

50.7

A

$0.27

RKT Rock-Tenn Company

$107.01

36.3

A

$2.48

SGY Stone Energy Corporation

$34.86

46.0

A

$0.78

NGLS Targa Resources Partners LP

$52.11

25.9

A

$0.32

THC Tenet Healthcare Corp

$47.19

38.0

A

$0.46

TDW Tidewater Inc.

$60.22

28.6

A

$0.86

WMGI Wright Medical Group Inc

$27.18

50.3

A

($0.18)

XPO XPO Logistics Inc

$20.18

49.2

A

($0.44)

 

Tuesday November 5:

Economic:  ICSC-Goldman Store Sales – 7:45, Gallup US Economic Confidence Index – 8:30, Redbook – 8:55, ISM Non-Manufacturing Index – 10:00.

International Economic:  EU PPI – 5:00 AM, Bank Of Japan Minutes – 6:50 PM.

Other:  Richmond Federal Reserve Bank President Jeffrey Lacker speech on workforce development in Charlotte, North Carolina – 12:30 PM, Francisco Fed President John Williams briefing at San Francisco Fed’s Asia Economic Policy Conference, in San Francisco – 5:10PM.

Optionable Earnings:

Symbol

Company Name

November 1 Close

IV30

B/A

XEPS

AKRX Akorn, Inc.

$20.44

35.8

B

$0.13

AFSI Amtrust Financial Services, Inc.

$38.36

53.4

B

$0.74

AOL AOL, Inc.

$36.24

58.6

B

$0.36

ASH Ashland Inc.

$92.55

48.5

B

$1.51

BOFI BofI Holding, Inc.

$60.42

49.3

B

$0.85

CLDX Celldex Therapeutics, Inc.

$22.90

126.6

B

($0.25)

CHTR Charter Communications, Inc.

$134.04

29.7

B

$0.21

CTSH Cognizant Technology Solutions Corp

$86.93

35.1

B

$1.01

CVS CVS Caremark Corporation

$62.26

21.2

B

$1.02

DLPH Delphi Automotive PLC

$57.20

26.8

B

$0.94

DTV DIRECTV

$62.49

25.8

B

$1.01

EMR Emerson Electric Co.

$66.97

20.2

B

$1.11

EXPD Expeditors Int’l of Washington

$45.29

31.9

B

$0.49

EXH Exterran Holdings, Inc.

$28.55

28.6

B

$0.23

FE FirstEnergy Corp.

$37.87

21.5

B

$0.92

HCA HCA Holdings Inc

$47.14

27.8

B

$0.79

HPT Hospitality Properties Trust

$29.38

20.3

B

$0.76

ICE IntercontinentalExchange Inc

$192.73

24.4

B

$1.82

ISIS ISIS Pharmaceuticals, Inc.

$33.27

68.0

B

($0.29)

MPEL Melco Crown Entertainment Ltd

$33.16

48.0

B

$0.31

KORS Michael Kors Holdings Ltd

$76.95

44.3

B

$0.68

MOS Mosaic Co

$45.85

28.6

B

$0.56

NXST Nexstar Broadcasting Group, Inc.

$44.39

54.6

B

$0.23

REGN Regeneron Pharmaceuticals Inc

$287.60

50.1

B

$0.99

RDC Rowan Companies PLC

$36.08

26.2

B

$0.43

TMUS T-Mobile Us Inc

$27.73

42.6

B

$0.05

FOX Twenty-First Century Fox Class B

$34.01

22.1

B

$0.35

VSI Vitamin Shoppe Inc

$46.91

65.3

B

$0.51

ZTS Zoetis Inc

$31.66

27.6

B

$0.35

AGU Agrium Inc. (USA)

$85.32

27.7

A

$0.59

AXLL Axiall Corp

$38.89

38.2

A

$1.00

CHRW C.H. Robinson Worldwide, Inc.

$59.74

34.6

A

$0.73

CTRP Ctrip.com International, Ltd. (ADR)

$54.26

74.1

A

$0.27

DVA DaVita HealthCare Partners Inc

$56.21

30.7

A

$0.96

FANG Diamondback Energy Inc

$51.65

47.6

A

$0.34

ETE Energy Transfer Equity, L.P.

$67.59

26.2

A

$0.63

FOSL Fossil Group Inc

$126.94

56.8

A

$1.38

A Gulfport Energy Corporation

$58.69

48.4

A

$0.13

IMPV Imperva Inc

$38.34

75.7

A

($0.19)

JAZZ Jazz Pharmaceuticals PLC

$90.74

42.4

A

$1.52

LINTA Liberty Interactive (Interactive group)

$26.96

30.9

A

$0.18

A MAKO Surgical Corp.

$29.81

21.5

A

($0.12)

MED Medifast Inc

$23.31

51.6

A

$0.41

MELI Mercadolibre Inc

$134.63

55.5

A

$0.73

MYGN Myriad Genetics, Inc.

$24.39

81.8

A

$0.46

NRP Natural Resource Partners LP

$21.40

23.0

A

$0.37

OKS Oneok Partners LP

$53.77

20.5

A

$0.64

OKE ONEOK, Inc.

$56.50

21.8

A

$0.29

OPEN OpenTable Inc

$69.48

52.1

A

$0.29

QEP QEP Resources Inc

$33.06

26.0

A

$0.23

REXX Rex Energy Corporation

$21.50

46.7

A

$0.17

SGEN Seattle Genetics, Inc.

$38.65

59.5

A

($0.22)

RGR Sturm, Ruger & Company

$65.41

55.7

A

$1.21

SXL Sunoco Logistics Partners L.P.

$70.18

20.1

A

$0.88

TSLA Tesla Motors Inc

$159.94

72.7

A

$0.00

HAIN The Hain Celestial Group, Inc.

$83.19

36.1

A

$0.51

FOXA Twenty-First Century Fox Inc

$34.08

22.9

A

$0.35

URS URS Corp

$54.22

32.1

A

$1.20

WWWW Web.com Group Inc

$26.95

75.8

A

$0.46

Z Zillow Inc

$79.63

73.2

A

($0.18)

 

Wednesday November 6:

Economic:  MBA Purchase Applications – 7:00, Gallup US Job Creation Index – 8;30, Leading Indicators 10:00,   EIA Petroleum Status Report – 10:30.

International Economic:  German PMI Composite – 4:00 AM, German Manufacturer’s Orders – 6:00 AM.

Other:  Twitter IPO.  Cleveland Federal Reserve Bank President Sandra Pianalto speech on housing and the economy, in Columbus, Ohio – 1:10PM.

Optionable Earnings: 

Symbol

Company Name

November 1 Close

IV30

B/A

XEPS

CSTE Caesarstone Sdot-Yam Ltd

$42.17

69.5

B

$0.48

CLMT Calumet Specialty Products Partners

$29.81

28.5

B

$0.18

CG Carlyle Group LP

$30.92

36.1

B

$0.63

CNP CenterPoint Energy, Inc.

$24.60

27.2

B

$0.36

CHK Chesapeake Energy Corporation

$27.96

33.2

B

$0.42

XEC Cimarex Energy Co

$105.35

42.9

B

$1.51

CLH Clean Harbors Inc

$61.75

34.1

B

$0.66

CWH CommonWealth REIT

$24.37

46.3

B

$0.62

DVN Devon Energy Corp

$63.22

26.5

B

$1.19

ENB Enbridge Inc (USA)

$43.39

21.9

B

$0.36

EZCH EZchip Semiconductor Ltd.

$25.90

60.6

B

$0.18

HCLP Hi-Crush Partners LP

$30.33

37.9

B

$0.68

HFC HollyFrontier Corp

$46.06

29.9

B

$0.65

HSP Hospira, Inc.

$40.52

30.0

B

$0.45

HUM Humana Inc

$92.15

27.8

B

$2.16

VOYA ING US Inc

$31.02

30.9

B

$0.66

LAMR Lamar Advertising Co

$45.71

41.7

B

$0.18

LIN LIN Media LLC

$24.57

45.1

B

$0.17

MGA Magna International Inc. (USA)

$84.70

26.9

B

$1.33

TAP Molson Coors Brewing Company

$54.00

23.4

B

$1.36

NPSP NPS Pharmaceuticals, Inc.

$28.78

74.6

B

($0.02)

PNK Pinnacle Entertainment, Inc

$23.40

40.9

B

$0.32

RL Ralph Lauren Corp

$165.64

35.3

B

$2.20

ROC Rockwood Holdings, Inc.

$63.25

28.8

B

$0.48

SBGI Sinclair Broadcast Group, Inc.

$32.05

44.7

B

$0.23

STRZA Starz

$30.15

34.8

B

$0.44

TWX Time Warner Inc

$68.74

22.9

B

$0.89

YY YY Inc (ADR)

$49.17

88.8

B

$0.27

ACAD ACADIA Pharmaceuticals Inc.

$22.73

66.4

A

($0.12)

ALNY Alnylam Pharmaceuticals, Inc.

$57.61

57.6

A

($0.38)

CBS CBS Corporation

$59.14

27.3

A

$0.76

CTL CenturyLink, Inc.

$33.86

23.5

A

$0.62

CXO Concho Resources Inc.

$110.61

42.6

A

$1.04

CNQR Concur Technologies, Inc.

$104.60

46.3

A

$0.05

CLR Continental Resources, Inc.

$113.90

43.8

A

$1.47

CXW Corrections Corp Of America

$37.00

25.5

A

$0.61

DXCM DexCom, Inc.

$28.73

56.4

A

($0.13)

FLTX FleetMatics Group PLC

$31.75

82.2

A

$0.19

AWAY HomeAway, Inc.

$29.65

57.8

A

$0.10

MDLZ Mondelez International Inc

$33.65

25.6

A

$0.41

NDLS Noodles & Co

$43.79

76.7

A

$0.11

OAS Oasis Petroleum Inc.

$53.25

47.9

A

$0.74

PMT PennyMac Mortgage Investment Trust

$23.07

26.9

A

$0.66

PCYC Pharmacyclics, Inc.

$118.64

62.1

A

$0.18

PHH PHH Corporation

$24.05

41.4

A

$0.24

PRU Prudential Financial Inc

$81.39

24.6

A

$2.10

QCOM QUALCOMM, Inc.

$69.49

25.8

A

$0.96

ROSE Rosetta Resources Inc.

$59.94

39.8

A

$0.92

SN Sanchez Energy Corp

$28.51

43.5

A

$0.36

SCTY SolarCity Corp

$53.35

85.1

A

($0.46)

TPX Tempur Sealy International Inc

$38.35

74.0

A

$0.69

TS Tenaris S.A. (ADR)

$46.81

26.2

A

$0.66

TSO Tesoro Corporation

$48.89

45.6

A

$0.50

RIG Transocean LTD

$47.07

27.9

A

$1.06

TROX Tronox Ltd

$23.09

36.8

A

($0.14)

SLCA U.S. Silica Holdings Inc

$34.82

69.8

A

$0.42

WFM Whole Foods Market, Inc.

$63.13

34.4

A

$0.31

TTM Tata Motors Limited (ADR)

$31.32

39.1

 A

$0.76

 

Thursday November 7:

Economic:   Chain Store Sales, Challenger Job-Cut Report 7:30, Gallup US Payroll to Population – 8:30, GDP (Gross Domestic Product) – 8:30. Jobless Claims – 8:30, Bloomberg Consumer Comfort Index – 9:45, EIA Natural Gas Report – 10:3000.

International Economic:  German Industrial Production – 6:00 AM, Bank of England Announcement – 7:00 AM, European Central Bank Announcement – 7:45 AM.

Other:  Federal Reserve Gov. Jeremy Stein speech at Chicago Fed’s International Banking Conference on shadow banking – 9:10.

Optionable Earnings: 

Symbol

Company Name

November 1 Close

IV30

B/A

XEPS

ATK Alliant Techsystems Inc.

$108.87

28.8

B

$2.34

APA Apache Corporation

$88.80

22.2

B

$2.17

APO Apollo Global Management LLC

$32.26

37.7

B

$0.70

BITA Bitauto Hldg Ltd (ADR)

$24.51

106.0

B

$0.25

CPN Calpine Corporation

$20.17

25.7

B

$0.66

CNQ Canadian Natural Resource Ltd

$31.75

29.3

B

$0.94

CTB Cooper Tire & Rubber Co

$26.01

81.8

B

$0.54

CMLP Crestwood Midstream Partners LP

$21.90

36.0

B

$0.12

DDS Dillard’s, Inc.

$81.98

36.5

B

$1.00

ENDP Endo Health Solutions Inc

$43.73

37.9

B

$1.12

EOG EOG Resources Inc

$178.40

33.4

B

$2.02

FNP Fifth & Pacific Companies Inc

$26.49

43.6

B

($0.01)

FLO Flowers Foods, Inc.

$25.34

26.5

B

$0.21

FWLT Foster Wheeler AG

$26.99

39.7

B

$0.42

FCN FTI Consulting, Inc.

$40.58

39.2

B

$0.48

IT Gartner Inc

$58.95

25.6

B

$0.39

HNT Health Net, Inc.

$30.40

48.6

B

$0.59

LPI Laredo Petroleum Holdings Inc

$31.77

40.8

B

$0.14

LGF Lions Gate Entertainment Corp. (USA)

$34.58

42.9

B

($0.03)

MEMP Memorial Production Partners LP

$20.81

23.8

B

$0.47

GOLD Randgold Resources Ltd. (ADR)

$73.90

41.9

B

$0.54

ROK Rockwell Automation

$110.41

29.7

B

$1.52

RGLD Royal Gold, Inc USA)

$48.04

44.7

B

$0.23

SNI Scripps Networks Interactive, Inc.

$80.50

24.4

B

$0.84

SI Siemens AG (ADR)

$128.01

21.5

B

$1.61

BID Sothebys

$51.90

28.6

B

$0.86

SFUN SouFun Holdings Limited (ADR)

$53.23

78.6

B

$0.86

SSYS Stratasys Ltd

$113.28

52.9

B

($0.15)

TK Teekay Corporation

$43.43

29.6

B

($0.55)

TGP Teekay LNG Partners L.P.

$41.50

20.3

B

$0.55

VC Visteon Corp

$77.09

31.2

B

$1.19

WAC Walter Investment Management Corp

$37.77

50.4

B

$1.35

WWAV WhiteWave Foods Co

$20.01

32.6

B

$0.18

WPX WPX Energy Inc

$22.14

34.6

B

($0.17)

AIRM Air Methods Corp

$43.72

54.4

A

$0.84

AREX Approach Resources Inc.

$28.15

47.2

A

$0.06

ATLS Atlas Energy LP

$49.81

30.6

A

$0.34

ARP Atlas Resource Partners, L.P.

$20.33

32.1

A

($0.14)

AVG AVG Technologies NV

$20.10

64.0

A

$0.43

CFN CareFusion Corporation

$38.77

29.3

A

$0.94

XTEX Crosstex Energy, L.P.

$25.43

34.7

A

($0.16)

DAR Darling International Inc.

$23.27

34.7

A

$0.34

EVEP EV Energy Partners, L.P.

$36.83

32.1

A

$0.19

PODD Insulet Corporation

$39.07

46.6

A

($0.17)

MNST Monster Beverage Corp

$57.23

39.4

A

$0.57

PCLN Priceline.com Inc

$1,053.83

38.7

A

$15.64

RNF Rentech Nitrogen Partners LP

$20.71

49.5

A

($0.01)

SLXP Salix Pharmaceuticals, Ltd.

$71.75

39.0

A

$0.95

SNTS Santarus, Inc.

$23.33

68.6

A

$0.26

SFM Sprouts Farmers Market Inc

$46.06

53.8

A

$0.10

DIS The Walt Disney Company

$68.59

23.3

A

$0.76

TUMI Tumi Holdings Inc

$21.35

57.4

A

$0.17

UBNT Ubiquiti Networks Inc

$38.58

106.3

A

$0.39

OLED Universal Display Corporation

$31.90

66.0

A

($0.03)

 

Friday November 8:

Economic: October Employment Situation – 8:30, Personal Income and Outlays – 8:30, University of Michigan/Reuters Consumer Sentiment – 9:55, JOLTS – 10:00.

International Economic: No major international announcements.

Other:  Atlanta Federal Reserve Bank President Dennis Lockhart speech on the economic outlook in Oxford, Mississippi – 12:00, Federal Reserve Chairman Ben Bernanke on panel at IMF discussing financial crisis panic, in Washington – 3:30, San Francisco Fed President John Williams speech on the economy and monetary policy in Los Angeles – 4:00.

Optionable Earnings:  None meeting sort criteria.

Monday November 11:

Us Holiday: Veteran’s Day – Markets open, Banks closed.

Economic:  No major announcements

International Economic:  Japan PMI Composite – 6:15 PM, China PMI Composite – 8:45.

Optionable Earnings:   

Symbol

Company Name

November 1 Close

IV30

B/A

XEPS

ABFS Arkansas Best Corporation

$27.37

60.2

B

$0.37

SLW Silver Wheaton Corp. (USA)

$22.67

43.4

B

$0.22

AGO Assured Guaranty Ltd.

$20.50

40.4

A

$0.61

HOLX Hologic, Inc.

$22.38

35.7

A

$0.37

NTI Northern Tier Energy LP

$23.26

38.1

A

$0.47

RAX Rackspace Hosting, Inc.

$51.23

58.2

A

$0.15

 

 

Papale on Covered Call Strike Placement

Unbelievable.  Last night the Boston Red Sox finished off the St. Louis Cardinals to win the World Series.  What I find astonishing is last year the Red Sox finished last in their division.   Dead last.  69-93.  And this year they won it all.  Hats off to the Red Sox.  Very impressive.  Ok Cubs take notice.  You’re right where you want to be this year – dead last.  I will see you in Wrigley Field next October.

There seems to be more dialog about a potential coming correction in the stock market.  Obviously the market has had a nice run-up this year and statistically at least, a downturn in stocks would not be all that alarming or surprising.  For the investor using a covered call approach, placement of the call can create some protection from a downward move in the stock.  As we probably know, covered calls work best in modestly upward moving markets as most call writers place their calls slightly out of the money.  Maximum profit occurs when the  stock just reaches the strike price.

However by placing the call at the money or even slightly in the money the call writer can gain more yield as extrinsic value of the option increases and can get more downside protection as the overall price of the call goes up. So if you’re concerned about a selloff, look to adjust your strike of your short call downward.   But always keep in mind that selling calls have limited downside protection.   If you want absolute downside protection without selling your position, the only way is buying puts.

The Prepared Mind: October 28, 2013

This bull market brings to mind a rant by John Belushi as Bluto in “Animal House,” “What? Over? Did you say “over”? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!”

It’s not over yet. It has become a running joke in the trading community that any down in the markets is a correction. This has become the bull market without end.  Investor sentiment is at its highest levels since January of 2012.  The put/call skew in the indexes is approaching new lows.  All 10 S&P market sectors are above the 50 day moving average.  The major indexes were up for the third week in a row.  The S&P 500 and the Russell 2000 hit all-time highs this week.  The Dow Jones Industrials are within 1.25% of an all-time high.  Crude oil finished lower for the third week in a row.  Small wonder investor and consumer sentiment are increasing.  The indexes have experienced a good year in the past two and a half weeks.  The NASDAQ is up over 8% since its lows on October 9.  The performances of other indexes are following close behind.  It has reached the point where naysayers are looked at the same way the animals viewed Chicken Little.

Here is a capsule view of last week’s market numbers:

Index Close Weekly Change % Weekly % YTD Volatility of  Index
Dow Jones Industrials (DJIA) 15,570.28 170.63 1.11% 18.82% 12.38% (VXD)
S&P 500 (SPX) 1,759.77 15.27 0.88% 23.39% 13.09% (VIX)
NASDAQ 100 (NDX) 3,383.83 29.95 0.89% 27.17% 14.91% (VXN)
Russell 2000 (RUT) 1,116.69 3.19 0.29% 30.78% 15.96% (RVX)
S&P 100 (OEX) 783.33 7.12 0.92% 21.14% 11.62%(VXO)
CBOE Volatility Index (VIX) 13.09 0.05 0.38% NA

The focus this week will be on the Fed and the FOMC meeting this week.  Traders and investors are anticipating Wednesday’s Fed announcement to help them divine when their will be a tapering in bond purchases.   Earnings and government will follow close behind.  September and October retail sales and motor vehicle sales will be announced this week. The dual reports are the result of the near three weeks of government shutdown.  The ADP Employment Report will be released Wednesday.   The ADP numbers will be parsed to I hopes of getting a jump on the release of the October Employment Situation numbers on Friday November 9.  Ignore the earnings season at your own peril.

 

Earnings announcements for the third quarter continue at robust levels.   OptionVue 7 now provides the earnings date and time for individual stocks on your main Quotes Display.  It is a separate column highlighting the date and time of individual earnings.  Earnings will continue have the potential to move individual stocks and the markets. Earnings include:  Apple, Merck, Biogen, ADM, Pfizer, Cummins, Visa, Corning, Phillips 66, Starbucks. MasterCard, Exxon Mobil, and Chevron.  I have compiled a more comprehensive list of earnings announcements below.

Every week I scan stocks announcing earnings the coming week. This week the scan produced over 200 stocks meeting robust criteria indicating liquid option markets.  I use the following criteria:  Price > 20, 30 Day Implied Volatility > 20, and Average Daily Option Volume > 200 contracts.  It is your responsibility to confirm the earnings dates. They can and do change.  Continue to be wary of trading any products where there is not adequate liquidity and narrow enough markets.  Analysts and market mavens are looking at the quality of Q3 earnings and for direction from the associated earnings conference calls.   You will notice that a stock may move in one direction on the earnings announcement and then move in the opposite direction during the conference call.  Be aware of the earnings date for any equity options you may trade with October or November expirations.

Trading advice to remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

“Stock market bubbles don’t grow out of thin air. They have a solid basis in

reality, but reality as distorted by a misconception.” – George Soros

October 28

Economic:  Economic:  Industrial Production – 9:15, Pending Home Sales Index – 10:00, Dallas Fed Manufacturing Survey – 10:30.

International Economic:  Japan Unemployment – 7:30 PM.

Other: 

Symbol

Company Name

October 25 Close

IV30

B/A

XEPS

BIIB Biogen Idec Inc

$249.22

36.4

B

$2.14

BWP Boardwalk Pipeline Partners, LP

$31.60

21.8

B

$0.25

CYOU Changyou.Com Ltd (ADR)

$37.44

62.9

B

$1.35

EW Edwards Lifesciences Corp

$77.46

34.8

B

$0.66

SOHU Sohu.com Inc

$81.55

57.1

B

$0.40

TEN Tenneco Inc

$53.40

37.4

B

$0.95

AGNC American Capital Agency Corp.

$24.11

22.2

A

$0.84

AAPL Apple Inc.

$531.91

36.6

A

$7.88

HIG Hartford Financial Services Group Inc

$33.48

25.8

A

$0.83

HLF Herbalife Ltd.

$67.59

65.7

A

$1.14

JLL Jones Lang LaSalle Inc

$84.16

32.6

A

$1.35

MAS Masco Corporation

$21.02

41.0

A

$0.25

OII Oceaneering International

$83.20

29.9

A

$0.94

OLN Olin Corporation

$22.14

34.1

A

$0.64

PCL Plum Creek Timber Co. Inc.

$49.48

21.3

A

$0.42

STX Seagate Technology PLC

$48.56

42.2

A

$1.31

DATA Tableau Software Inc

$64.21

68.9

A

($0.13)

TXRH Texas Roadhouse Inc

$27.38

27.2

A

$0.25

 

Optionable Earnings:

Tuesday October 29:

Economic: ICSC-Goldman Store Sales – 7:45, Producer Price Index (PPI) – 8:30. Retail Sales – 8:30, Redbook – 8:55, S&P Case-Shiller Home Price Index – 9:00, Business Inventories – 10:00, Conference Board Consumer Confidence – 10:00, State Street Investor Confidence Index – 10:00.

International Economic:  Japan Industrial Production – 7:50 PM.

Other:  FOMC meeting begins.

Optionable Earnings:

Symbol

Company Name

October 25 Close

IV30

B/A

XEPS

PTR PetroChina Company Limited (ADR)

$114.24

23.0

D

$3.31

DDD 3D Systems Corporation

$57.70

58.2

B

$0.22

ACT Actavis PLC

$146.42

24.6

B

$2.09

AET Aetna Inc

$61.70

26.7

B

$1.53

AGCO AGCO Corporation

$64.19

26.1

B

$1.29

APD Air Products & Chemicals, Inc.

$111.38

25.2

B

$1.47

ALR Alere Inc

$31.17

42.2

B

$0.37

AGN Allergan, Inc.

$92.81

22.6

B

$1.21

ADM Archer Daniels Midland Company

$39.18

35.6

B

$0.48

CIE Cobalt International Energy, Inc.

$23.37

86.2

B

($0.15)

CVLT CommVault Systems, Inc.

$85.07

48.9

B

$0.30

CMI Cummins Inc.

$137.86

26.9

B

$2.10

ETR Entergy Corporation

$68.10

20.1

B

$2.27

HRS Harris Corporation

$60.06

28.1

B

$1.13

HCP HCP, Inc.

$42.39

22.3

B

$0.77

HUN Huntsman Corporation

$22.47

35.4

B

$0.54

JCI Johnson Controls Inc

$42.99

25.6

B

$0.94

LYB LyondellBasell Industries NV

$78.05

27.0

B

$1.59

MDC M.D.C. Holdings, Inc.

$30.78

37.1

B

$0.64

OXY Occidental Petroleum Corporation

$97.03

26.2

B

$1.91

PCAR PACCAR Inc

$58.47

23.8

B

$0.85

AMTD TD Ameritrade Holding Corp.

$27.65

26.1

B

$0.35

GT The Goodyear Tire & Rubber Company

$22.15

40.7

B

$0.75

TRI Thomson Reuters Corporation (USA)

$35.37

20.7

B

$0.44

TRW TRW Automotive Holdings Corp.

$79.16

32.4

B

$1.48

X United States Steel Corporation

$23.72

42.2

B

($0.43)

VLO Valero Energy Corporation

$39.42

35.1

B

$0.49

AMP Ameriprise Financial, Inc.

$99.53

23.9

A

$1.73

BIDU Baidu Inc (ADR)

$161.34

57.3

A

$1.43

BXP Boston Properties, Inc.

$107.38

21.0

A

$1.28

BWLD Buffalo Wild Wings

$121.11

42.4

A

$0.86

CBG CBRE Group Inc

$23.53

34.9

A

$0.35

CBI Chicago Bridge & Iron Company N.V.

$74.34

26.8

A

$1.12

CRUS Cirrus Logic, Inc.

$24.77

68.3

A

$0.52

DLR Digital Realty Trust, Inc.

$57.30

26.8

A

$1.20

DWA Dreamworks Animation Skg Inc

$28.16

47.4

A

$0.01

EA Electronic Arts Inc.

$24.74

47.8

A

$0.02

FISV Fiserv, Inc.

$105.60

21.0

A

$1.51

GILD Gilead Sciences, Inc.

$69.83

31.0

A

$0.48

LOPE Grand Canyon Education Inc

$44.20

52.7

A

$0.45

IACI IAC/InterActiveCorp

$56.60

33.8

A

$0.83

LNKD LinkedIn Corp

$243.29

61.9

A

$0.01

QCOR Questcor Pharmaceuticals Inc

$68.56

93.6

A

$1.34

RRC Range Resources Corp.

$73.20

34.0

A

$0.22

SFLY Shutterfly, Inc.

$54.83

66.3

A

($0.62)

SM SM Energy Co.

$85.27

38.6

A

$1.05

SWI SolarWinds Inc

$36.82

60.6

A

$0.31

RYL The Ryland Group, Inc.

$43.52

43.7

A

$0.96

TRLA Trulia Inc

$46.08

80.7

A

$0.01

VRTX Vertex Pharmaceuticals Incorporated

$76.91

43.2

A

($0.39)

VPRT VistaPrint Limited

$54.56

46.9

A

$0.16

WBMD WebMD Health Corp.

$35.44

61.4

A

$0.09

WSH Willis Group Holdings PLC

$46.13

27.3

A

$0.20

YELP Yelp Inc

$68.52

86.2

A

($0.01)

 

Wednesday October 30:

Economic:  MBA Purchase Applications – 7:00,  ADP Employment Report – 8:15, Consumer Price Index (CPI) – 8:30,  EIA Petroleum Status Report – 10:30.

International Economic:  Bank of Japan Announcement

Other:  FOMC Meeting Announcement – 2:00.

Optionable Earnings: 

Symbol

Company Name

October 25 Close

IV30

B/A

XEPS

AEGR Aegerion Pharmaceuticals, Inc.

$89.62

73.5

B

($0.49)

AMT American Tower Corp

$80.38

20.2

B

$0.53

BWA BorgWarner Inc.

$106.67

27.6

B

$1.34

CMCSA Comcast Corporation

$47.76

21.8

B

$0.60

CMCSK Comcast Corporation

$46.40

21.4

B

$0.63

DBD Diebold Incorporated

$29.67

28.4

B

$0.41

EGN Energen Corporation

$83.02

35.1

B

$0.61

EXXI Energy XXI (Bermuda) Limited

$30.74

37.4

B

$0.64

EXC Exelon Corporation

$27.74

20.5

B

$0.67

GRMN Garmin Ltd.

$48.83

37.2

B

$0.60

GM General Motors Company

$35.63

29.5

B

$0.91

HES Hess Corp.

$83.09

24.8

B

$1.47

LVLT Level 3 Communications, Inc.

$27.04

41.7

B

($0.10)

PCYC Pharmacyclics, Inc.

$124.27

62.1

B

$0.30

PSX Phillips 66

$63.23

32.1

B

$0.91

SEE Sealed Air Corp

$28.45

33.6

B

$0.33

SODA Sodastream International Ltd

$62.02

72.4

B

$0.71

SAVE Spirit Airlines Incorporated

$42.03

39.6

B

$0.69

TEL TE Connectivity Ltd

$53.74

22.9

B

$0.90

MTGE American Capital Mortgage Investment

$20.90

24.8

A

$0.78

ARII American Railcar Industries, Inc.

$41.64

39.4

A

$0.98

CAR Avis Budget Group Inc.

$30.06

37.8

A

$1.56

BYI Bally Technologies Inc.

$70.77

31.0

A

$0.90

CJES C&J Energy Services Inc

$22.56

35.6

A

$0.36

CAVM Cavium Inc

$37.26

45.8

A

$0.10

CLDX Celldex Therapeutics, Inc.

$24.73

118.5

A

$0.36

CYH Community Health Systems

$41.44

43.8

A

$0.70

CSC Computer Sciences Corporation

$51.77

43.3

A

$0.83

CNW Con-way Inc

$45.29

38.3

A

$0.62

EXP Eagle Materials, Inc.

$76.71

34.6

A

$0.80

EXPE Expedia Inc

$50.50

53.9

A

$1.26

FB Facebook Inc

$52.45

73.9

A

$0.13

FLT FleetCor Technologies, Inc.

$110.41

40.8

A

$0.94

HBI Hanesbrands Inc.

$63.57

30.4

A

$1.14

JAH Jarden Corp

$52.01

27.1

A

$1.00

LNC Lincoln National Corporation

$44.44

30.2

A

$1.23

MAR Marriott International Inc

$44.61

22.7

A

$0.45

MEOH Methanex Corporation (USA)

$56.87

31.3

A

$0.99

MET Metlife Inc

$48.57

23.5

A

$1.35

MCHP Microchip Technology Inc.

$38.99

24.2

A

$0.55

MUR Murphy Oil Corporation

$61.65

24.9

A

$1.49

NSR Neustar Inc

$48.59

35.9

A

$0.81

OIS Oil States International, Inc.

$107.24

29.1

A

$1.48

OTEX Open Text Corporation (USA)

$77.68

37.3

A

$1.23

OI Owens-Illinois Inc

$30.22

29.9

A

$0.77

PKI PerkinElmer, Inc.

$38.21

31.6

A

$0.48

STR Questar Corporation

$23.15

20.5

A

$0.17

SWKS Skyworks Solutions Inc

$23.71

50.0

A

$0.53

SU Suncor Energy Inc. (USA)

$35.56

23.0

A

$0.84

SPWR SunPower Corporation

$33.57

71.8

A

$0.23

ALL The Allstate Corporation

$53.55

22.5

A

$1.30

THOR Thoratec Corporation

$39.61

44.6

A

$0.29

TRN Trinity Industries Inc

$47.11

29.3

A

$1.15

V Visa Inc

$202.91

23.0

A

$1.85

WTW Weight Watchers International, Inc.

$39.19

54.7

A

$0.84

WMB Williams Companies, Inc.

$36.88

28.2

A

$0.14

XL XL Group plc

$31.95

22.4

A

$0.51

 

Thursday October 31:

Economic:   Challenger Job-Cut Report 7:30, Gallup US Payroll to Population – 8:30, Jobless Claims – 8:30, Chicago PMI – 9:45,   Bloomberg Consumer Comfort Index – 9:45, EIA Natural Gas Report – 10:30, Farm Prices – 3:00.

International Economic:  Japan PMI Manufacturing Index – 7:15 PM.

Other:  Tick or Treat

Optionable Earnings: 

Symbol

Company Name

October 25 Close

IV30

B/A

XEPS

AAP Advance Auto Parts, Inc.

$99.42

28.5

B

$1.44

ALKS Alkermes Plc

$34.74

45.2

B

$0.23

ABC AmerisourceBergen Corp.

$64.64

21.9

B

$0.74

BUD Anheuser Busch Inbev SA (ADR)

$103.18

21.4

B

$1.32

AVP Avon Products, Inc.

$21.76

44.6

B

$0.19

ABX Barrick Gold Corporation (USA)

$20.07

39.3

B

$0.49

BEAM BEAM Inc

$68.18

25.7

B

$0.60

NILE Blue Nile Inc

$40.66

45.9

B

$0.17

CRR CARBO Ceramics Inc.

$101.86

54.3

B

$0.83

CAH Cardinal Health Inc

$55.02

21.2

B

$0.85

CTRX Catamaran Corp (USA)

$49.75

38.9

B

$0.48

GTLS Chart Industries, Inc.

$126.40

42.3

B

$0.90

CI CIGNA Corporation

$73.17

26.8

B

$1.52

ABV Companhia de Bebidas das Americas (ADR)

$38.71

23.3

B

$0.31

CNX CONSOL Energy Inc.

$38.24

41.4

B

$0.03

DGI DigitalGlobe Inc

$31.02

49.3

B

($0.14)

DISCA Discovery Communications Inc.

$84.95

24.4

B

$0.73

EL Estee Lauder Companies Inc

$71.39

27.8

B

$0.74

FNP Fifth & Pacific Companies Inc

$26.62

45.2

B

($0.01)

HAR Harman International Industries Inc./DE/

$72.90

40.4

B

$0.84

HCA HCA Holdings Inc

$45.80

27.7

B

$0.79

HSH Hillshire Brands Co

$32.20

27.4

B

$0.34

INCY Incyte Corporation

$39.82

50.4

B

($0.13)

IDCC InterDigital, Inc.

$35.58

44.2

B

$0.04

IVZ Invesco Ltd.

$32.65

28.3

B

$0.52

IRM Iron Mountain Incorporated

$26.75

53.2

B

$0.30

B Linn Energy LLC

$28.13

53.2

B

$0.18

MMP Magellan Midstream Partners, L.P.

$59.80

20.2

B

$0.58

MPC Marathon Petroleum Corp

$69.21

34.6

B

$0.67

MA Mastercard Inc

$724.69

23.6

B

$6.95

MGM MGM Resorts International

$20.64

36.0

B

($0.03)

MYL Mylan Inc

$38.49

27.7

B

$0.78

OCN Ocwen Financial Corp

$58.00

41.3

B

$1.13

PBF PBF Energy Inc

$26.35

46.7

B

($0.07)

PRGO Perrigo Company

$129.20

26.6

B

$1.40

PRLB Proto Labs Inc

$88.10

61.0

B

$0.34

PWR Quanta Services Inc

$29.22

32.9

B

$0.41

O Realty Income Corp

$41.54

21.2

B

$0.61

STRA Strayer Education Inc

$48.74

53.9

B

$0.05

TDC Teradata Corporation

$45.45

38.3

B

$0.64

TEVA Teva Pharmaceutical Industries Ltd (ADR)

$40.32

20.9

B

$1.26

TWC Time Warner Cable Inc

$119.49

29.2

B

$1.64

VRX Valeant Pharmaceuticals Intl Inc

$114.29

35.4

B

$1.40

WNR Western Refining, Inc.

$33.60

39.6

B

$0.50

AIG American International Group Inc

$51.80

24.1

A

$0.93

BBG Bill Barrett Corporation

$27.45

39.8

A

($0.10)

CLVS Clovis Oncology Inc

$54.63

119.4

A

($0.63)

DRC Dresser-Rand Group Inc.

$61.24

33.3

A

$0.68

ELLI Ellie Mae Inc

$29.34

53.1

A

$0.15

FSLR First Solar, Inc.

$54.22

83.1

A

$0.91

FLR Fluor Corporation (NEW)

$76.88

28.3

A

$1.03

GDOT Green Dot Corporation

$20.51

55.2

A

$0.18

HTZ Hertz Global Holdings, Inc.

$23.99

40.6

A

$0.71

MELI Mercadolibre Inc

$139.57

53.1

A

$0.73

MHK Mohawk Industries, Inc.

$131.73

37.5

A

$1.90

NEM Newmont Mining Corp

$27.65

37.4

A

$0.32

OHI Omega Healthcare Investors Inc

$33.45

21.2

A

$0.62

SWN Southwestern Energy Company

$36.76

24.8

A

$0.51

SBUX Starbucks Corporation

$79.05

28.3

A

$0.60

TRMB Trimble Navigation Limited

$28.95

32.9

A

$0.33

 

Friday November 1:

Economic: Motor Vehicle Sales, PMI Manufacturing Index – 8:58, ISM Manufacturing Index – 10:00.

International Economic: EMU PMI Manufacturing – 5:00 AM.

Other:  St Louis Federal Reserve Bank President James Bullard speech on the economy and monetary policy in St Louis – 8:00, Minneapolis Federal Reserve Bank President Narayana Kocherlakota opening remarks at healt conference in St. Paul – 11:15.

Optionable Earnings:  

Symbol

Company Name

October 25 Close

IV30

B/A

XEPS

CBOE CBOE Holdings, Inc

$50.28

22.4

B

$0.45

CTB Cooper Tire & Rubber Co

$24.51

72.0

B

$0.54

CVI CVR Energy, Inc.

$40.25

40.9

B

$0.41

CVRR CVR Refining LP

$24.58

43.8

B

$0.50

IPGP IPG Photonics Corporation

$62.41

41.3

B

$0.84

WCG WellCare Health Plans, Inc.

$67.12

39.5

B

$1.52

CQP Cheniere Energy Partners LP

$31.11

33.6

A

$0.24

LNG Cheniere Energy, Inc.

$39.13

39.9

A

($0.50)

 

Monday November 4:

Economic:  Gallup US Consumer Spending Measure – 8:30, Factory Orders – 10:00, TD Ameritrade IMX – 12:30.

International Economic:  Japan PMI Composite – 6:15 PM, China PMI Composite – 8:45.

Optionable Earnings:

Symbol

Company Name

October 25 Close

IV30

B/A

XEPS

CME CME Group Inc

$76.97

24.7

B

$0.73

CST CST Brands Inc

$31.41

29.4

B

$0.51

RLGY Realogy Holdings Corp

$44.21

45.7

B

$0.89

SYY SYSCO Corporation

$32.83

22.0

B

$0.48

VMC Vulcan Materials Company

$54.85

30.8

B

$0.25

APC Anadarko Petroleum Corporation

$94.29

31.8

A

$1.19

APL Atlas Pipeline Partners, L.P.

$38.67

22.9

A

$0.28

BSFT BroadSoft Inc

$35.67

77.3

A

($0.08)

CF CF Industries Holdings, Inc.

$210.13

29.4

A

$3.93

CHMT Chemtura Corp

$24.04

41.7

A

$0.22

DNB Dun & Bradstreet Corp

$106.82

29.7

A

$1.88

BGC General Cable Corporation

$32.83

39.1

A

$0.55

GIMO Gigamon Inc

$33.07

59.0

A

$0.08

GDP Goodrich Petroleum Corporation

$26.51

65.4

A

($0.39)

MRO Marathon Oil Corporation

$35.60

23.0

A

$0.78

MR Mindray Medical International Ltd (ADR)

$40.92

53.0

A

$0.45

NFX Newfield Exploration Co.

$31.29

38.7

A

$0.48

PXD Pioneer Natural Resources

$209.88

38.9

A

$1.33

PPO Polypore International, Inc.

$44.13

48.8

A

$0.27

RKT Rock-Tenn Company

$107.18

34.8

A

$2.48

SGY Stone Energy Corporation

$35.90

41.2

A

$0.78

NGLS Targa Resources Partners LP

$53.87

24.8

A

$0.32

THC Tenet Healthcare Corp

$45.27

39.2

A

$0.46

TDW Tidewater Inc.

$59.55

27.5

A

$0.86

TWTC TW Telecom Inc

$31.16

31.4

A

$0.12

WMGI Wright Medical Group Inc

$27.10

46.6

A

($0.18)

XPO XPO Logistics Inc

$23.07

44.4

A

($0.44)

 

 

 

 

 

Papale on Market Makers

Chalk one up for the gen-gers.  That’s the geriatric generation.  This week the St. Louis Rams gave grandfather and totally grey bearded Brett Favre a call to see if he might be interested in joining the team to play quarterback.  Favre, is coaching shuffleboard – I mean high school football in his home state of Mississippi – right after his nap but before dinner.  All kidding aside,  Favre is 44 and the Rams must think he can still play – at least better than the pool of quarterbacks out there right now.  It seems however, Favre has told his agent he has no interest in un-retiring.  Note to Rams – maybe try Y A Tittle or Johnny Unitas.

Stopped by my old trading firm the other day to have lunch with a couple of my old partners.  Boy have times changed.  When I was there albeit 15 years ago the place was teaming with traders, clerks and office people.  At one point we had 100 traders and another 100 support staff.  Now there is a new office space ¼ the size of the old one and only a handful of traders and staff.  In fact, it is only a matter of time before they close their doors for good.  What changed for them?   Option volume is up pretty much every year.  In one word – edge.  Traders need edge or profit to trade.

Market makers get the edge from the bid ask spread multiplied by the volume of options traded.  Volume is good but the bid asked spreads have gotten much tighter over the years.  Much of this is due to trading of stock options over several exchanges allowing for more competition along with the introduction of technology.  For whatever the reasons the result is tighter markets which benefits the retail or “price taker” option trader.  That includes most of us. Like I told my partners – we all have to evolve and adapt over time.  So keep paying attention and keep learning. It’s what traders and people must do to survive and thrive.

The Prepared Mind: October 21, 2013

Last week’s market brings brought to mind “Bye Bye Birdie” and the song “Put On A Happy Face:”

 

Gray skies are gonna clear up,
Put on a happy face;
Brush off the clouds and cheer up,
Put on a happy face.

Take off the gloomy mask of tragedy,
It’s not your style;
You’ll look so good that you’ll be glad
Ya’ decide to smile!

 

It appears it is safe again for this premium seller to stick his toe back in the market water. Interim budget and debt ceiling agreements were reached late Wednesday.   Price movement in the indexes and the VIX refelected this market bravado.  Equities soared 2% to 4%.  The S&P 500 set a new closing record high of 1, 744.50.  The NDX closed at its highest levels since 2000.  It is up 26% for the year following a near 4% gain.  All the other indexes are trading at the upper ends of their trading range.  The NDX has rallied 7% off the previous week’s lows.  The VIX responded to the good news by reaching its lowest levels in over 2 months.  The story of the last three weeks has been “The bull market is dead.  Long live the bull market.”  We do not have a lasting solution the past few weeks’ vexing problem.  Congress kicked the can down the legislative street to February of 2014.

Here is a capsule view of last week’s market numbers:

Index

Close

Weekly Change

% Weekly

% YTD

Volatility of  Index

Dow Jones Industrials (DJIA)

15,399.65

162.54

1.07%

17.52%

12.83% (VXD)

S&P 500 (SPX)

1,744.50

41.30

2.42%

22.32%

13.04% (VIX)

NASDAQ 100 (NDX)

3,353.88

120.05

3.71%

26.04%

11.81% (VXN)

Russell 2000 (RUT)

1,113.50

28.50

2.63%

27.44%

15.39% (RVX)

S&P 100 (OEX)

776.21

18.48

2.44%

20.04%

11.77% (VXO)

CBOE Volatility Index (VIX)

13.04

-2.68

-17.05%

NA

Earnings and government reports once again take the central stage.  The September Jobs report will be released on Tuesday – 17 days late.  The Bureau of Labor department responsible for the numbers was staffed by only 3 people during the shutdown.   These numbers will be parsed to help ascertain the date of tapering of Fed buying.  Current estimates of the moving target for ending tapering are.  are Q2 2014.   Other federal agencies will now be releasing their reports in a timely manner.  This week’s report will focus on housing, manufacturing and consumer sentiment.

 

The main focus will be on earnings.  Earnings announcements for the third quarter will be at their highest numbers this week.    IBM, eBay and Goldman Sachs announced disappointing earnings last week which initially sent their shows downwards.  Google posted earnings which caused the stock to move up $100 to over $1,000.   Every week I scan stocks announcing earnings the coming week. This week the scan produced over 200 stocks meeting robust criteria indicating liquid option markets.  I use the following criteria:  Price > 20, 30 Day Implied Volatility > 20, and Average Daily Option Volume > 200 contracts.  It is your responsibility to confirm the earnings dates. They can and do change.  Continue to be wary of trading any products where there is not adequate liquidity and narrow enough markets.  Analysts and market mavens are looking at the quality of Q3 earnings and for direction from the associated earnings conference calls.   You will notice that a stock may move in one direction on the earnings announcement and then move in the opposite direction during the conference call.  Be aware of the earnings date for any equity options you may trade with October or November expirations.

Trading advice to remember:

  “Chance favors the Prepared Mind.” – Louis Pasteur

“The United States is a nation of laws: badly written and randomly enforced” – Frank Zappa

This week’s economic news (All times are Eastern Daylight Time.) Events, dates and times are subject to change:

Monday October 21

Economic:  Chicago Fed National Activity Index – 8:30, Existing Home Sales – 10:00, EIA Petroleum Status Report – 10:30.

International Economic:  German PPI – 2:00 AM.

Other:  Chicago Federal Reserve Bank President Charles Evans interviewed on CNBC – 8:30.

Optionable Earnings:

Symbol

Company Name

October 18 Close

IV30

B/A

XEPS

CHKP Check Point Software Technologies Ltd.

$57.57

35.8

B

$0.78

GCI Gannett Co., Inc.

$26.95

35.3

B

$0.41

HAL Halliburton Company

$51.72

29.5

B

$0.83

HAS Hasbro, Inc.

$46.83

26.8

B

$1.27

MAN Manpowergroup Inc

$77.95

33.9

B

$1.08

SAP SAP AG (ADR)

$72.89

26.7

B

$0.98

VFC VF Corp

$201.89

26.7

B

$3.77

DFS Discover Financial Services

$53.72

25.3

A

$1.20

IEX IDEX Corporation

$65.56

24.0

A

$0.74

ILMN Illumina, Inc.

$82.10

37.7

A

$0.40

NFLX Netflix, Inc.

$330.10

60.6

A

$0.48

TXN Texas Instruments Incorporated

$40.65

21.5

A

$0.57

VMW VMware, Inc.

$78.74

49.7

A

$0.60

ZION Zions Bancorporation

$29.27

24.4

A

$0.43

ARMH ARM Holdings plc (ADR)

$49.13

39.8

B

$0.19

 

Tuesday October 22:

Economic:  ICSC-Goldman Store Sales – 7:45, Employment Situation – 8:30, Redbook – 8:55, Richmond Fed Manufacturing Index – 10:00, EIA Natural Gas Report – 10:30.

International Economic:  China Merchandise Trade Balance – 2:00.

Other:  Apple announcement.  iPad upgrades?

Optionable Earnings:

Symbol

Company Name

October 18 Close

IV30

B/A

XEPS

CIT CIT Group Inc.

$50.91

22.2

B

$0.94

COH Coach, Inc.

$54.14

42.6

B

$0.77

DAL Delta Air Lines, Inc.

$24.79

35.0

B

$1.34

DD E I Du Pont De Nemours And Co

$59.64

20.1

B

$0.41

EMC EMC Corporation

$24.62

25.6

B

$0.37

FCX Freeport-McMoRan Copper & Gold Inc.

$34.71

25.8

B

$0.62

FRX Forest Laboratories, Inc.

$44.72

24.3

B

$0.14

HOG Harley-Davidson, Inc.

$65.48

28.7

B

$0.72

LMT Lockheed Martin Corporation

$129.36

20.9

B

$2.26

LXK Lexmark International Inc

$34.75

42.9

B

$0.92

MHFI McGraw Hill Financial Inc

$69.22

27.8

B

$0.78

NUS Nu Skin Enterprises, Inc.

$100.25

63.5

B

$1.42

PII Polaris Industries Inc.

$132.92

34.7

B

$1.61

R Ryder System, Inc.

$60.71

27.4

B

$1.44

STT State Street Corporation

$69.52

21.4

B

$1.19

WHR Whirlpool Corporation

$134.70

39.3

B

$2.64

ALTR Altera Corporation

$37.83

27.9

A

$0.34

AMGN Amgen, Inc.

$115.85

23.8

A

$1.72

APOL Apollo Group Inc

$21.10

52.1

A

$0.25

BCR C.R. Bard, Inc.

$122.83

22.5

A

$0.48

BRCM Broadcom Corporation

$27.05

33.9

A

$0.48

CBST Cubist Pharmaceuticals Inc

$67.18

60.1

A

$0.55

CREE Cree, Inc.

$72.84

54.2

A

$0.32

IRBT iRobot Corporation

$35.68

58.6

A

$0.24

JNPR Juniper Networks, Inc.

$20.68

39.1

A

$0.22

PNRA Panera Bread Co

$160.55

35.2

A

$1.35

RHI Robert Half International Inc.

$40.53

34.2

A

$0.48

UIS Unisys Corporation

$25.93

53.7

A

$1.25

 

Wednesday October 23:

Economic:  MBA Purchase Applications – 7:00,  Import and Export Prices – 8:30, FHFA House Price Index – 9:00, EIA Petroleum Status Report – 10:30.

International Economic:  Bank of England Minutes – 4:30 AM, China PMI Flash Manufacturing Index, 9:50 PM.

Optionable Earnings: 

Symbol

Company Name

October 18 Close

IV30

B/A

XEPS

ATI Allegheny Technologies Incorporated

$31.40

38.4

B

($0.28)

BA The Boeing Company

$122.29

23.2

B

$1.54

BEAV B/E Aerospace Inc

$77.41

26.1

B

$0.88

BMY Bristol-Myers Squibb Co

$49.67

20.1

B

$0.44

BPOP Popular Inc

$25.41

42.7

B

$0.70

CP Canadian Pacific Railway Limited (USA)

$129.27

23.2

B

$1.68

EAT Brinker International, Inc.

$41.00

32.7

B

$0.46

EDU New Oriental Education & Tech Grp (ADR)

$26.26

41.1

B

$0.78

GRA W.R. Grace & Co.

$91.75

31.2

B

$0.99

LAD Lithia Motors Inc

$69.80

40.8

B

$1.10

LCC US Airways Group Inc

$21.00

38.5

B

$1.07

LL Lumber Liquidators Holdings Inc

$107.09

51.1

B

$0.66

LO Lorillard Inc.

$47.52

23.3

B

$0.81

MDCO The Medicines Company

$33.38

42.1

B

$0.24

MSI Motorola Solutions Inc

$60.92

27.8

B

$0.92

MTH Meritage Homes Corp

$43.29

42.5

B

$0.81

NDAQ NASDAQ OMX Group, Inc.

$34.08

23.4

B

$0.62

OC Owens Corning

$38.84

31.8

B

$0.64

OCR Omnicare, Inc.

$57.18

28.2

B

$0.90

OSIS OSI Systems, Inc.

$75.26

35.8

B

$0.42

PLD Prologis Inc

$40.04

21.4

B

$0.41

SIX Six Flags Entertainment Corp

$34.10

31.2

B

$1.54

TMO Thermo Fisher Scientific Inc.

$95.62

24.3

B

$1.28

TUP Tupperware Brands Corporation

$91.97

26.4

B

$1.03

WLP WellPoint, Inc.

$88.59

26.3

B

$1.83

WYN Wyndham Worldwide Corporation

$63.81

23.7

B

$1.36

AEM Agnico Eagle Mines Ltd (USA)

$25.52

46.4

A

$1.25

AKAM Akamai Technologies, Inc.

$52.04

47.3

A

$0.38

CAKE The Cheesecake Factory Incorporated

$43.41

25.1

A

$0.51

CCI Crown Castle International Corp.

$76.81

22.2

A

$0.17

CTXS Citrix Systems, Inc.

$57.25

36.0

A

$0.50

EQIX Equinix Inc

$168.00

37.1

A

$0.57

ESV ENSCO PLC

$55.00

21.6

A

$1.67

EVR Evercore Partners Inc.

$50.17

33.2

A

$0.44

FFIV F5 Networks, Inc.

$85.92

46.3

A

$0.98

LRCX Lam Research Corporation

$53.52

29.9

A

$0.71

MLNX Mellanox Technologies, Ltd.

$38.33

77.0

A

$0.08

NOW ServiceNow Inc

$51.71

53.1

A

($0.13)

NXPI NXP Semiconductors NV

$37.52

33.7

A

$0.56

ORLY O’Reilly Automotive Inc

$135.19

27.7

A

$1.65

SKX Skechers USA Inc

$28.91

44.9

A

$0.61

SWFT Swift Transportation Co

$20.43

44.7

A

$0.29

SYMC Symantec Corporation

$25.09

30.7

A

$0.40

TAL TAL International Group, Inc.

$49.38

30.4

A

$1.10

TEX Terex Corporation

$32.96

42.9

A

$0.59

TRIP Tripadvisor Inc

$72.74

60.4

A

$0.38

TRN Trinity Industries Inc

$45.30

30.2

A

$1.15

TSCO Tractor Supply Company

$66.44

28.7

A

$0.41

VAR Varian Medical Systems, Inc.

$78.55

28.3

A

$1.12

WLL Whiting Petroleum Corp

$67.24

33.3

A

$1.00

WYNN Wynn Resorts, Limited

$169.46

26.1

A

$1.64

IDCC InterDigital, Inc.

$37.00

41.4

 A

$0.04

 

 

Thursday October 24:

Economic:   Jobless Claims – 8:30, Housing Starts – 8:30, PMI Manufacturing Index Flash – 8:58,   Bloomberg Consumer Comfort Index – 9:45, JOLTS – 10:00, New Home Sales – 10:00, EIA Natural Gas Report – 10:30, Kansas City Fed Manufacturing Report – 11:00 EIA Petroleum Status Report – 11:00.

International Economic:  EMU PMI Composite FLASH – 4:00 AM, Japan CPI 7:30.

Optionable Earnings: 

Symbol

Company Name

October 18 Close

IV30

B/A

XEPS

ABB ABB Ltd (ADR)

$23.41

20.2

G

$0.37

AMX America Movil SAB de CV (ADR)

$21.67

29.0

D

$0.50

SCCO Southern Copper Corp

$28.64

27.9

D

($0.18)

TCK Teck Resources Ltd (USA)

$27.33

37.0

D

$0.34

AB AllianceBernstein Holding LP

$21.36

32.4

B

$0.38

ALK Alaska Air Group, Inc.

$65.46

32.9

B

$2.10

ALXN Alexion Pharmaceuticals, Inc.

$110.79

38.6

B

$0.71

AN AutoNation, Inc.

$49.67

30.6

B

$0.78

AVT Avnet, Inc.

$41.93

29.2

B

$0.88

BC Brunswick Corporation

$43.40

38.3

B

$0.53

BEN Franklin Resources, Inc.

$53.51

24.3

B

$0.86

BG Bunge Ltd

$81.03

20.6

B

$2.24

CAB Cabelas Inc

$61.68

38.7

B

$0.72

CAM Cameron International Corporation

$64.97

28.6

B

$0.83

CCE Coca-Cola Enterprises Inc

$41.91

24.6

B

$0.80

CELG Celgene Corporation

$160.00

29.5

B

$1.38

DNKN Dunkin Brands Group Inc

$47.33

25.2

B

$0.43

DO Diamond Offshore Drilling Inc

$62.50

23.6

B

$1.18

DOW The Dow Chemical Company

$41.39

24.9

B

$0.54

EQT EQT Corporation

$89.56

27.9

B

$0.50

ESI ITT Educational Services, Inc.

$34.07

62.8

B

$0.54

FLIR FLIR Systems, Inc.

$28.99

30.2

B

$0.32

FNP Fifth & Pacific Companies Inc

$26.02

43.1

B

($0.01)

GG Goldcorp Inc. (USA)

$24.53

39.9

B

$0.20

GNC GNC Holdings Inc

$55.60

37.1

B

$0.76

GNRC Generac Holdings Inc.

$40.73

43.7

B

$0.83

HOT Starwood Hotels & Resorts Worldwide Inc

$69.13

26.6

B

$0.63

IMAX IMAX Corporation (USA)

$26.66

39.7

B

$0.01

IP International Paper Company

$45.28

25.3

B

$0.94

KKR KKR & Co. L.P.

$22.01

29.9

B

$0.56

LAZ Lazard Ltd

$38.71

28.3

B

$0.35

LINE Linn Energy LLC

$27.11

43.5

B

$0.19

LNCO LinnCo LLC

$30.65

44.3

B

$0.39

MCK McKesson Corporation

$142.82

22.6

B

$2.02

MCO Moody’s Corporation

$71.96

27.8

B

$0.82

MJN Mead Johnson Nutrition CO

$79.34

29.4

B

$0.79

NBL Noble Energy, Inc.

$70.73

25.5

B

$0.95

PCP Precision Castparts Corp.

$241.58

24.0

B

$2.82

POT Potash Corp./Saskatchewan (USA)

$32.10

24.5

B

$0.41

PTEN Patterson-UTI Energy, Inc.

$23.24

33.7

B

$0.30

PVR PVR Partners LP

$26.25

25.5

B

$0.08

QSII Quality Systems, Inc.

$23.25

40.3

B

$0.23

RCL Royal Caribbean Cruises Ltd.

$38.78

31.2

B

$1.63

SHPG Shire PLC (ADR)

$122.01

31.5

B

$1.64

TKR The Timken Company

$58.97

28.9

B

$0.88

TROW T. Rowe Price Group, Inc.

$76.34

20.7

B

$0.95

UA Under Armour Inc

$82.12

35.6

B

$0.66

UAL United Continental Holdings Inc

$31.15

42.1

B

$1.65

UFS Domtar Corp (USA)

$86.27

28.0

B

$1.25

USG USG Corporation

$26.57

42.9

B

$0.22

VPHM Viropharma Inc

$37.94

76.5

B

$0.06

WRLD World Acceptance Corp.

$100.74

32.2

B

$2.00

YNDX Yandex NV

$39.22

48.3

B

$0.25

ZMH Zimmer Holdings, Inc.

$87.88

20.4

B

$1.25

AMZN Amazon.com, Inc.

$310.77

35.1

A

($0.09)

BMRN BioMarin Pharmaceutical Inc.

$68.18

64.1

A

($0.28)

CA CA, Inc.

$30.02

26.5

A

$0.68

CERN Cerner Corporation

$57.12

33.1

A

$0.33

CLF Cliffs Natural Resources Inc

$22.89

55.2

A

$0.70

COG Cabot Oil & Gas Corporation

$36.34

35.7

A

$0.15

DECK Deckers Outdoor Corp

$59.97

59.0

A

$0.72

DNB Dun & Bradstreet Corp

$107.07

29.2

A

$1.88

DV DeVry Inc.

$32.99

50.9

A

$0.23

EMN Eastman Chemical Company

$81.46

29.5

A

$1.64

ESRX Express Scripts Holding Co

$64.18

23.5

A

$1.08

FLS Flowserve Corporation

$63.50

21.3

A

$0.84

INFA Informatica Corporation

$37.01

50.0

A

$0.24

KBR KBR, Inc.

$34.78

27.1

A

$0.71

KLAC KLA-Tencor Corporation

$63.88

26.8

A

$0.65

MSFT Microsoft Corporation

$34.92

23.3

A

$0.54

MXIM Maxim Integrated Products Inc.

$29.65

26.0

A

$0.41

N NetSuite Inc

$109.10

47.7

A

($0.18)

NCR NCR Corporation

$40.52

32.3

A

$0.68

OUTR Outerwall Inc

$64.72

53.1

A

$0.88

PFG Principal Financial Group Inc

$45.62

22.5

A

$0.87

QLIK Qlik Technologies Inc

$32.51

63.7

A

($0.02)

RMD ResMed Inc.

$55.87

42.6

A

$0.58

SPN Superior Energy Services, Inc.

$26.45

26.3

A

$0.42

SYNA Synaptics, Incorporated

$55.07

52.1

A

$1.06

THRX Theravance Inc

$35.12

47.6

A

($0.79)

VRSN Verisign, Inc.

$52.10

26.5

A

$0.53

WDC Western Digital Corp

$70.46

37.7

A

$2.04

 

Friday October 25:

Economic: Durable Goods Orders – 8:30, Consumer Sentiment – 9:55..

International Economic: Great Britain GDP – 4:30..

Optionable Earnings:  

Symbol

Company Name

October 18 Close

IV30

B/A

XEPS

ABBV AbbVie Inc

$48.17

22.3

B

$0.78

AON Aon PLC

$74.20

20.3

B

$1.04

COL Rockwell Collins, Inc.

$70.17

22.5

B

$1.32

ETN Eaton Corporation PLC

$67.33

25.1

B

$1.12

LEA Lear Corporation

$74.47

25.8

B

$1.32

LM Legg Mason Inc

$36.24

24.1

B

$0.93

NOV National-Oilwell Varco, Inc.

$80.99

22.9

B

$1.32

NWL Newell Rubbermaid Inc.

$28.68

21.3

B

$0.50

SHW Sherwin-Williams Company

$185.00

30.0

B

$2.62

VTR Ventas, Inc.

$65.82

22.0

B

$1.02

WY Weyerhaeuser Company

$30.01

23.2

B

$0.21

 

Monday October 28:

Economic:  Industrial Production – 9:15, Pending Home Sales Index – 10:00, Dallas Fed Manufacturing Survey – 10:30.

International Economic:  No Major Announcements

Optionable Earnings:

Symbol

Company Name

October 18 Close

IV30

B/A

XEPS

BIIB Biogen Idec Inc

$247.10

33.2

B

$2.12

CYOU Changyou.Com Ltd (ADR)

$36.96

59.4

B

$1.35

EW Edwards Lifesciences Corp

$77.07

32.9

B

$0.66

SOHU Sohu.com Inc

$82.50

53.8

B

$0.40

TEN Tenneco Inc

$52.85

34.0

B

$0.95

AAPL Apple Inc.

$504.50

31.3

A

$7.85

AGNC American Capital Agency Corp.

$23.47

22.1

A

$0.84

HIG Hartford Financial Services Group Inc

$34.13

25.5

A

$0.82

HLF Herbalife Ltd.

$64.86

64.6

A

$1.14

JLL Jones Lang LaSalle Inc

$85.92

30.0

A

$1.35

OII Oceaneering International

$82.91

27.9

A

$0.94

OLN Olin Corporation

$22.81

29.7

A

$0.64

PCL Plum Creek Timber Co. Inc.

$49.09

21.4

A

$0.42

STX Seagate Technology PLC

$48.46

39.2

A

$1.30

TXRH Texas Roadhouse Inc

$26.41

30.7

A

$0.25