Weekly Wrap-up - The Dow Jones Industrial Average Gains 47 Points on the Week

The day ends with the Dow Jones Industrial Average (DJIA) more or less flat as it rebounded from a morning selloff. The same could be said for the S&P 500 (SPX) and Russell 2000 (RUT) while the Nasdaq Composite (COMP) posted a minor loss. The streetTRACKS Gold (GLD) and AMEX Pharmaceutical Index (DRG) led while the Oil Service HOLDRS (OIH), SPDR Homebuilders (XHB), and Amex Networking Index (NWX) lagged.

My midday post touched on the lackluster action this week. Compared to last Friday's close, the Dow gained 47 points. The S&P 500 and Russell 2000 were flat while the Nasdaq Composite lost 1%. The headlines below offer a play-by-play of how the week progressed.

• Monday - Daily Wrap-up - A 136-Point Gain for the Dow Jones Industrial Average
• Tuesday - Daily Wrap-up - A 30-Point Gain for the Dow Jones Industrial Average
• Wednesday - Daily Wrap-up - The Dow Jones Industrial Average Rallies Back to Flat
• Thursday - Daily Wrap-up - A 93-Point Loss for the Dow Jones Industrial Average

I ended last week saying I was watching the SPX and COMP to see if they could breakout. As discussed the last few days, the indexes did tick above resistance but didn't secure the sort of decisive breakout I was looking for. They have now drifted back below resistance and the Russell 2000 is at support. The Dow is the lone breakout holdout. With the Thanksgiving holiday looming, I would expect next week's volume to be light. Regular readers have seen me note that I tend to put less emphasis on the charts around holidays. I will still be watching the action but I think we may end up with a higher potential for whipsaw moves. And that is where I will pick up on Monday. Have a great weekend.

Chart Courtesy of Thomson Reuters

Click here for symbol descriptions

Charts Courtesy of Thomson Reuters

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Call Traders Flock to Downtrodden Ambac Financial Group, Inc.

Call volume popped yesterday on Ambac Financial Group, Inc. (ABK), representing a notable deviation from the recent trend toward puts. In fact, the stock's 10-day International Securities Exchange (ISE) put/call volume ratio stands at 0.63, in the 95th annual percentile. In other words, option players have snapped up puts over calls at a faster pace only 5% of the time during the past year.

Nevertheless, calls were in favor on Thursday. During the course of the session, traders on the ISE bought to open 1,287 calls on ABK, compared to just one put. The day's most active strike was the out-of-the-money November 1 call, with 9,099 contracts crossing the tape. Implied volatility shot 304% higher as a result, but open interest deflated overnight from 11,472 contracts to 9,263 contracts. In other words, the day's volume at this strike was most likely a mix of both newly added positions and liquidations of existing contracts.

ABK has been in the spotlight this week as investors fret about its liquidity position. The stock shot higher on Wednesday after the insurance issue said that the statutory capital of its main unit was well above minimum regulatory standards. However, the shares remain pinned beneath short-term resistance from their 20-day moving average.

While the stock seems an unlikely candidate for optimistic speculation, some of yesterday's call buyers might have been short sellers looking to hedge their bearish positions against an extended rally. Currently, short interest accounts for 15.7% of ABK's float.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Las Vegas Sands Corp. Draws Single-Day Spike in Call Buying

Traders on Thursday opted for bullishly oriented bets on Las Vegas Sands Corp. (LVS). During the course of the session, speculators on the International Securities Exchange (ISE) bought to open 4,613 calls on LVS, compared to 1,646 puts. The stock's single-day call/put volume ratio arrived at 2.80, revealing that calls bought to open nearly tripled their put counterparts.

Among near-term options, call players are favoring narrowly out-of-the-money options. LVS' November 17 call carries peak front-month open interest of 18,747 contracts, and the December 17.50 call is home to a hefty accumulation of 34,965 contracts. Currently, LVS is trading just shy of $16.50.

After checking out the casino concern's price action, yesterday's surge in optimistic speculation comes as no surprise. LVS has trended consistently higher since April, using support at its 10-week and 20-week moving averages to rack up a gain of 186% in 2009.

However, it's possible that some of Thursday's call buying was the result of hedging by short sellers. Skeptics have sold short nearly 15% of LVS' float, so these bears could be looking to protect themselves against a continuation of the equity's uptrend.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Midday Market Check - The Dow Jones Industrial Average Drops 45 Points

We head into the second half of the session with moderate losses on the board. The Dow Jones Industrial Average (DJIA) is the strongest of the broad market barometers but is still down 45 points. The S&P 500 (SPX) is down 0.5% while the Nasdaq Composite (COMP) and Russell 2000 (RUT) are a bit weaker.

Today's strongest groups are the AMEX Pharmaceutical Index (DRG), iShares Treasury Bond (TLT), and streetTRACKS Gold (GLD). The Oil Service HOLDRS (OIH), SPDR Homebuilders (XHB), and Amex Networking Index (NWX) are the weakest areas.

For the most part, the market is flat on the week. The DJIA is showing a very slight gain while the SPX, COMP, and RUT are sitting on small losses. As usual, I will check in after the close with my overall thoughts.

In the meantime, make sure you check out Bernie Schaeffer's latest article - Schaeffer's Media Outtake: Thoughts on Hedging, Volatility - for some thoughts on the launch of the S&P 500 Dynamic VEQTOR Index.

Chart Courtesy of Thomson Reuters

Click here for symbol descriptions

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Option Skews - Relatively Heavy Call Activity on Research in Motion Limited, Petroleo Brasileiro SA, Potash Corp. of Saskatchewan, King Pharmaceuticals Inc

Here are the stocks that saw a bias toward call activity in the previous session. This filtered scan is based on the International Securities Exchange (ISE) buy-to-open data. It looks for stocks where the previous day's call volume on the ISE is at least twice as great as the put volume. It then sorts the stocks based on the call volume. Since this is buy-to-open data, this can be a good source for finding stocks where optimism is emerging. Of particular interest to me would be situations where we see call activity on stocks that are still in intermediate-term downtrends. This would be a potentially cautionary sign from the contrarian perspective.

Companies included in today's scan results: Dell Inc (DELL), DryShips Inc. (DRYS), E-Trade Financial Corp (ETFC), Intel Corp. (INTC), Research in Motion Limited (RIMM), Ford Motor Co (F), Wells Fargo & Co (WFC), Jacobs Engineering Group (JEC), Las Vegas Sands Corp (LVS), United States Steel Corp (X), Petroleo Brasileiro SA (PBR), Wal-Mart Stores Inc (WMT), The DirectTV Group Inc (DTV), United Parcel Service (UPS), Potash Corp. of Saskatchewan (POT), Colgate-Palmolive Co (CL), Barrick Gold (ABX), CVS Corp. (CVS), Moody's Corp. (MCO), UnitedHealth Group Inc (UNH), Yahoo! Inc (YHOO), Visa Inc. (V), Monsanto Co (MON), Diana Shipping Inc. (DSX), King Pharmaceuticals Inc (KG).

Research in Motion Limited, Petroleo Brasileiro SA, Potash Corp. of Saskatchewan, and King Pharmaceuticals Inc are the charts that stood out to me -

• Earlier this month I noted how Research in Motion was continuing to deteriorate. I left that post saying the equity was oversold but rebound attempts faced multiple layers of resistance. The daily chart shows a text book bounce and rollover. The recent lows are now the key level to watch as the stock appears to be transitioning into an orderly downtrend.
• My last comments on Petroleo Brasileiro explored how I had been wrong about stalled momentum. A check of the updated daily chart shows the stock dipped from the overbought condition and retested the top of the former range. The equity is now in a position to break above the October highs.
• The weekly chart of Potash Corp. of Saskatchewan shows the shares are challenging their mid-year highs. This stock has been a mover in the past so it is one to watch.
• King Pharmaceuticals is another situation to keep an eye on. Yesterday's pop pushed the equity into resistance in place for two years.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Option Skews - Relatively Heavy Put Activity on Amazon.com Inc and Johnson & Johnson

Here are the stocks that saw a bias toward put activity in the previous session. This filtered scan is based on the International Securities Exchange (ISE) buy-to-open data. It looks for stocks where the previous day's put volume on the ISE is at least twice as great as the call volume. It then sorts the stocks based on the put volume. Since this is buy-to-open data, this can be a good source for finding stocks where skepticism is emerging. Of particular interest to me would be situations where we see put activity on stocks that are still in intermediate-term uptrends. This would be a potentially encouraging sign from the contrarian perspective.

Companies included in today's scan results: PowerShares QQQ Trust (QQQQ), ChevronTexaco (CVX), Magellan Health Services (MGLN), Amazon.com Inc (AMZN), Intuit (INTU), Express Scripts (ESRX), Aruba Networks, Inc. (ARUN), Warner Chilcott Limited (WCRX), Johnson & Johnson (JNJ), Molex Incorporated (MOLX), Toll Brothers (TOL), American Electric Power (AEP), Abbott Laboratories (ABT), Western Digital (WDC), Zions Bancorporation (ZION), Marathon Oil (MRO), Garmin (GRMN), Realty Income (O), McDonald's (MCD), AngloGold Ashanti. (AU), Autodesk (ADSK), MetLife (MET), Kohl's Corp. (KSS), Medicis Pharmaceutical (MRX), Vulcan Materials (VMC).

Amazon.com Inc and Johnson & Johnson are the charts that stood out to me -

• I last discussed Amazon.com ahead of earnings and said that a positive reaction could put the stock above resistance and leave the Street scrambling to catch up. The weekly chart shows that the stock powered through its previous highs with gusto. The equity is overbought but I would at pullbacks as potential long opportunities.
• Johnson & Johnson may be best known as the typical defense-type name with its staple of consumer products, but check out the weekly chart. The shares have put in a solid rally off their November lows and then moved to a tight consolidation phase. The stock is currently testing the upper edge of the recent congestion zone. A breakout would set the stage for a resumption of the uptrend so keep an eye on the chart.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Stocks Advancing Amid Heavy Short Interest - Williams-Sonoma Inc, Ameristar Casinos Inc, Cyberonics Inc, iRobot Corp, Gamestop Corp

As explained in our education section, short interest is a useful sentiment indicator that measures the level of investor pessimism toward a stock. While it isn't always a simple "long only" indicator, it can give you insight into situations where you might see concentrated buying demand. The purpose of this post is to highlight heavily-shorted stocks that could be in the midst of a potential short covering rally. More details about the methodology are listed below.

Companies included in today's scan are: Pacific Capital Bancorp (PCBC), Capitol Bancorp. (CBC), Williams-Sonoma Inc (WSM), GSI Commerce (GSIC), Ameristar Casinos Inc (ASCA), Sterling Financial (STSA), GT Solar International Inc (SOLR), Whole Foods Market (WFMI), Cyberonics Inc (CYBX), Magma Design Automation (LAVA), iRobot Corporation (IRBT), Rosetta Stone Inc (RST), St. Joe (JOE), Gamestop Corp (GME), American Superconductor (AMSC), The DirectTV Group Inc (DTV), Enzon Pharmaceuticals (ENZN), Georgia Gulf (GGC), Insulet Corporation (PODD), Cascade Bancorp (CACB), The Gymboree Corp (GYMB), Hecla Mining (HL), Barnes & Noble (BKS), Endurance Specialty (ENH), Cbeyond, Inc. (CBEY).

Methodology - the query scans my database of companies which has some basic filters to eliminate stocks that don't trade frequently. The table above is a filtered list of stocks that have at least 10 percent of their float sold short and showed a gain in the previous trading day. I use this as a tool for finding situations where stocks with heavy short interest have begun to move.

Like this post?

If so, you can get it delivered to your inbox every day. To try it, simply click here and sign in with your Schaeffer's username and password. (If you don't have a Schaeffer's Plus account, you can create one in just seconds by clicking here - it is free.) Once on the alerts page, select "phrase" from the first drop down box, select "intraday", and enter "Stocks Advancing Amid Heavy Short Interest" into the third box. You can repeat that process for other regular posts or change the setting to "author" and enter "Nick Perry" to get all the posts. Just remember, I make multiple posts a day so you will get numerous emails if you select intraday...

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Stocks Showing Unusually Heavy Volume - Pre-Paid Legal Services Inc, Hot Topic Inc, China Medical Technologies Inc, Trina Solar Limited

Here are the results for today's unusual stock volume scan. The scan looks at the previous day's volume and compares it to the recent average volume. It then sorts the stocks based on those that showed the biggest increase (the "unusual" part) in volume.

Companies included in today's scan are: Pre-Paid Legal Services Inc (PPD), Affymax, Inc. (AFFY), Sappi (SPP), Tenneco Automotive (TEN), Build-A-Bear Workshop, Inc. (BBW), Central European Distribution (CEDC), Hot Topic Inc (HOTT), Solarfun Power Holdings Co Ltd (SOLF), China Medical Technologies Inc (CMED), The DirectTV Group Inc (DTV), Dick's Sporting Goods Inc (DKS), City Holding (CHCO), Comverge, Inc. (COMV), Cyberonics (CYBX), Donaldson (DCI), Jack In The Box (JBX), Trina Solar Limited (TSL), AirTran Holdings Inc (AAI), Netlist, Inc. (NLST), Williams-Sonoma (WSM), United Online (UNTD), ArthroCare Corp (ARTC), Suntech Power Holdings Co Ltd (STP), Akeena Solar Inc (AKNS), Eagle Bulk Shipping Inc. (EGLE).

These are the top stocks from today's scan, which has some basic filters to eliminate stocks that don't trade frequently. A description of the column headings is below.

• Move Previous Day - yesterday's percent return.
• Volume Increase - looks at the previous day's volume and compares it to the recent average volume. It then sorts the stocks based on those that showed the biggest increase (the "unusual" part) in volume.
• Close - yesterday's closing price.
• Total Ratings - number of analysts who track the stock, according to Zacks.
• Buy Percent - percent of the analysts who rate the stock as a "buy". I use this to help gauge sentiment and potential buying demand. If everyone already loves a stock, that means a steady stream of new money will need to enter the stock to fuel a rally.

Note - sentiment data is current as of the previous trading day...

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Futures on the Dow Jones Industrial Average Suggest a 60-Point Loss

Good morning everyone - welcome to Friday. We start the day with stock futures once again showing a downside bias. The S&Ps are 8 points below fair value. As they stand now, futures on the Dow Jones Industrial Average (DJIA) are suggesting an opening drop of 60 points.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Daily Wrap-up - A 93-Point Loss for the Dow Jones Industrial Average

The day ends with the Dow Jones Industrial Average (DJIA) showing a loss of 93 points. The decline represents a loss of nearly 1% but that is well off the morning lows. The S&P 500 (SPX) and Nasdaq Composite (COMP) each lost over 1% while the Russell 2000 (RUT) dropped 2.4%.

The Amex Gold Bugs Index (HUI), iShares Treasury Bond (TLT), and streetTRACKS Gold (GLD) led while the Oil Service HOLDRS (OIH) and Semiconductor HOLDRS (SMH) were the two weakest areas.

My midday post noted that the S&P 500 and Nasdaq Composite had dipped back below the support/resistance I have been discussing. However, the Dow and Russell 2000 are still holding above support so it will be interesting to watch how this plays out. Up until now I have fairly unconcerned about the lack of decisive breakouts by the SPX and COMP so we will get to see if my complacency was a warning sign. And that is where I will pick up in the morning. Have a nice evening.

Chart Courtesy of Thomson Reuters

Click here for symbol descriptions

Charts Courtesy of Thomson Reuters

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Bears Favor At-the-Money Puts on Kraft Foods Inc.

Put volume was unusually heavy yesterday on Kraft Foods Inc. (KFT), with activity surging to twice the usual level. During the course of the session, traders on the International Securities Exchange (ISE) bought to open 5,954 puts on KFT, compared to just 95 calls. In other words, 62.67 times more bearish bets than bullish were purchased.

The day's bias toward pessimistic positions was part of a growing trend for KFT. Between the ISE and the Chicago Board Options Exchange (CBOE), the stock has racked up a 10-day put/call volume ratio of 1.73. This ratio ranks higher than 94% of comparable readings taken during the previous year, as speculators have rarely purchased puts over calls at a faster pace.

Yesterday's flood of bearish option volume occurred as Kraft gained new competition in its bid to acquire Cadbury (CBY), with Hershey (HSY) and Ferrero announcing that they're reviewing a potential offer for the British candy company. Today, puts continue to dominate KFT's option pits -- about 15,000 contracts have traded so far, roughly tripling the expected volume.

Put players have zeroed in on the 27 strike, which is home to peak put open interest for the November and December series of options. With KFT positioned narrowly above this strike, the equity could benefit from options-related support during the short term. However, with stubborn resistance from its 80-day moving average hovering just overhead, the stock's progress could be stymied during the short term.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Diagonal Spread Suggests Skepticism on SLM Corporation

SLM Corporation (SLM) attracted a diagonal spread today, with the trader focusing in on the equity's November 11 call and January 2010 15 call. Around noon, two blocks totaling 2,000 contracts crossed the tape on SLM's November 11 call, with the transactions taking place closer to the bid price -- suggesting they were sold. Simultaneously, a single block of 2,000 contracts changed hands at the ask price on SLM's January 15 call, revealing that they were most likely purchased.

The typical way to proceed in this diagonal spread would be to repurchase the sold 11-strike call at expiration, or simply let them expire worthless. Then, the trader will sell another batch of 2,000 calls, this time at the January 11 strike. In this manner, the diagonal spread trader has legged into a traditional short call spread. The sale of the front-month calls has effectively lowered the cost of entering the position.

So, by opening this diagonal spread, it seems safe to assume that the trader expects SLM to remain stagnant during the near term. The equity is currently trading just north of $11, which means that those sold front-month calls are in the money by a very slim margin.

However, the speculator is likely betting that SLM will continue to be stymied by resistance at its 20-month moving average. This long-term trendline is looming directly overhead, and it hasn't been bested on a monthly closing basis since June 2007.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Midday Market Check - The Dow Jones Industrial Average Drops 135 Points

We head into the second half of the session with the Dow Jones Industrial Average (DJIA) down 135 points. However, the average is off its lows of the day when the loss ticked to 170 points. The S&P 500 (SPX) and Nasdaq Composite (COMP) are each down more than 1% while the Russell 2000 (RUT) is off more than 2%.

The iShares Treasury Bond (TLT) is the only gainer on my sector list. The Semiconductor HOLDRS (SMH), Oil Service HOLDRS (OIH), Natural Gas Index (XNG), and Broker/Dealer Index (XBD) are among the weakest areas.

As I noted this morning, my closing comments from last night are hitting me right in the face. With the selling, the SPX and COMP are dipping back below the support/resistance shown below. I will follow up after the close to see how the charts settle on the day.

Chart Courtesy of Thomson Reuters

Click here for symbol descriptions

Charts Courtesy of Thomson Reuters

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Option Skews - Relatively Heavy Call Activity on DryShips Inc, LDK Solar Co Ltd, Goldcorp Inc

Here are the stocks that saw a bias toward call activity in the previous session. This filtered scan is based on the International Securities Exchange (ISE) buy-to-open data. It looks for stocks where the previous day's call volume on the ISE is at least twice as great as the put volume. It then sorts the stocks based on the call volume. Since this is buy-to-open data, this can be a good source for finding stocks where optimism is emerging. Of particular interest to me would be situations where we see call activity on stocks that are still in intermediate-term downtrends. This would be a potentially cautionary sign from the contrarian perspective.

Companies included in today's scan results: DryShips Inc. (DRYS), Hecla Mining (HL), General Electric (GE), Colgate-Palmolive Co (CL), Monster Worldwide (MWW), Ford Motor Co (F), Advanced Micro Devices (AMD), E-Trade Financial Corp (ETFC), Pfizer (PFE), Microsoft Corp (MSFT), Dell Inc (DELL), Pepsico (PEP), Bunge Limited (BG), Diana Shipping Inc. (DSX), LDK Solar Co Ltd (LDK), Yamana Gold Inc (AUY), SunPower Corporation (SPWRA), Deere & Co (DE), Gamestop Corp (GME), Exxon Mobil (XOM), American Eagle Outfitters (AEO), Genco Shipping & Trading Limited (GNK), MGM Mirage (MGM), Cisco Systems Inc (CSCO), Goldcorp Incorporated (GG).

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Option Skews - Relatively Heavy Put Activity on SanDisk Corp and Marvell Technology Group Ltd

Here are the stocks that saw a bias toward put activity in the previous session. This filtered scan is based on the International Securities Exchange (ISE) buy-to-open data. It looks for stocks where the previous day's put volume on the ISE is at least twice as great as the call volume. It then sorts the stocks based on the put volume. Since this is buy-to-open data, this can be a good source for finding stocks where skepticism is emerging. Of particular interest to me would be situations where we see put activity on stocks that are still in intermediate-term uptrends. This would be a potentially encouraging sign from the contrarian perspective.

Companies included in today's scan results: Kraft Foods (KFT), Salesforce.com Inc (CRM), SanDisk Corp. (SNDK), Target Corp. (TGT), Chesapeake Energy Corp (CHK), Marvell Technology Group Ltd (MRVL), Western Digital (WDC), Frontline. (FRO), Tenneco Automotive (TEN), Tesoro Petroleum (TSO), Yingli Green Energy Hold Co Ltd (YGE), Gap (GPS), HSBC, plc. (HBC), Illinois Tool Works (ITW), Trina Solar Limited (TSL), Massey Energy (MEE), Williams Companies (WMB), United Technologies (UTX), Mobile TeleSystems (MBT), W.W. Grainger (GWW), Whole Foods Market (WFMI), Johnson & Johnson (JNJ), Chiquita Brands International (CQB), Best Buy Co. (BBY), Activision Blizzard Inc (ATVI).

SanDisk Corp and Marvell Technology Group Ltd are the charts that stood out to me -

• The daily chart of SanDisk shows the stock is pulling back to support near 19. The shares are nearing an oversold condition so this could be a potential bounce candidate.
• The daily chart of Marvell Technology shows the equity is under pressure amid today's broad-based weakness. The stock recently tagged resistance near 17 and hit an overbought reading before the selloff. However, equity is still in a well above support. Given that the shares are coming off a strong uptrend, I am keeping this on the watch list to see how this consolidation pattern plays out.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Stocks Advancing Amid Heavy Short Interest - Ambac Financial Group Inc, Advanced Micro Devices Inc, Freddie Mac, Monster Worldwide Inc

As explained in our education section, short interest is a useful sentiment indicator that measures the level of investor pessimism toward a stock. While it isn't always a simple "long only" indicator, it can give you insight into situations where you might see concentrated buying demand. The purpose of this post is to highlight heavily-shorted stocks that could be in the midst of a potential short covering rally. More details about the methodology are listed below.

Companies included in today's scan are: Ambac Financial Group Inc (ABK), Pacific Capital Bancorp (PCBC), Amcore Financial (AMFI), Advanced Micro Devices Inc (AMD), MBIA Inc (MBI), Trex (TWP), PMI Group (PMI), Freddie Mac (FRE), Monster Worldwide Inc (MWW), American Capital Ltd (ACAS), Superior Well Services, Inc. (SWSI), Cell Therapeutics (CTIC), TBS International Limited (TBSI), Frontline. (FRO), Cheesecake Factory Incorporated (CAKE), Fannie Mae (FNM), Genco Shipping & Trading Limited (GNK), Douglas Emmett, Inc. (DEI), Bank of the Ozarks (OZRK), Century Aluminum (CENX), GSI Commerce (GSIC), Panera Bread (PNRA), Superior Industries International (SUP), Rosetta Stone Inc (RST), Ethan Allen Interiors (ETH).

Methodology - the query scans my database of companies which has some basic filters to eliminate stocks that don't trade frequently. The table above is a filtered list of stocks that have at least 10 percent of their float sold short and showed a gain in the previous trading day. I use this as a tool for finding situations where stocks with heavy short interest have begun to move.

Like this post?

If so, you can get it delivered to your inbox every day. To try it, simply click here and sign in with your Schaeffer's username and password. (If you don't have a Schaeffer's Plus account, you can create one in just seconds by clicking here - it is free.) Once on the alerts page, select "phrase" from the first drop down box, select "intraday", and enter "Stocks Advancing Amid Heavy Short Interest" into the third box. You can repeat that process for other regular posts or change the setting to "author" and enter "Nick Perry" to get all the posts. Just remember, I make multiple posts a day so you will get numerous emails if you select intraday...

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Stocks Showing Unusually Heavy Volume - ArthroCare Corp, Techwell Inc, Krispy Kreme Doughnuts, Solarfun Power Holdings Co Ltd

Here are the results for today's unusual stock volume scan. The scan looks at the previous day's volume and compares it to the recent average volume. It then sorts the stocks based on those that showed the biggest increase (the "unusual" part) in volume.

Companies included in today's scan are: ArthroCare Corp (ARTC), Techwell, Inc. (TWLL), Krispy Kreme Doughnuts (KKD), Smith International (SII), Concur Technologies (CNQR), Solarfun Power Holdings Co Ltd (SOLF), Greenhill (GHL), La-Z-Boy Incorporated (LZB), CORUS GROUP PLC (CGA), China Sunergy Co., Ltd. (CSUN), Autodesk (ADSK), DynCorp International Inc. (DCP), Salix Pharmaceuticals (SLXP), Colgate-Palmolive Co (CL), Nordic American Tanker Shipping (NAT), Netlist, Inc. (NLST), Chico's FAS (CHS), United Online (UNTD), LDK Solar Co Ltd (LDK), Salesforce.com Inc (CRM), Ambac Financial Group (ABK), Eagle Bulk Shipping Inc. (EGLE), Amcore Financial (AMFI), Monster Worldwide (MWW), DryShips Inc. (DRYS).

These are the top stocks from today's scan, which has some basic filters to eliminate stocks that don't trade frequently. A description of the column headings is below.

• Move Previous Day - yesterday's percent return.
• Volume Increase - looks at the previous day's volume and compares it to the recent average volume. It then sorts the stocks based on those that showed the biggest increase (the "unusual" part) in volume.
• Close - yesterday's closing price.
• Total Ratings - number of analysts who track the stock, according to Zacks.
• Buy Percent - percent of the analysts who rate the stock as a "buy". I use this to help gauge sentiment and potential buying demand. If everyone already loves a stock, that means a steady stream of new money will need to enter the stock to fuel a rally.

Note - sentiment data is current as of the previous trading day...

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Futures on the Dow Jones Industrial Average Suggest a 75-Point Loss

Good morning everyone - welcome to Thursday. We start the day with stock futures showing a downside bias. The S&Ps are 10 points below fair value. As they stand now, futures on the Dow Jones Industrial Average (DJIA) are suggesting an opening loss of 75 points.

I ended yesterday saying I didn't see anything in the charts that looked ominous so I am wondering if my words are going to come back to haunt me here.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Daily Wrap-up - The Dow Jones Industrial Average Rallies Back to Flat

The day ends with a dash back to the breakeven line. At its lows of the session, the Dow Jones Industrial Average (DJIA) was down 77 points but it closed with a loss of only 11 points. The S&P 500 (SPX) was also flat while the Nasdaq Composite (COMP) and Russell 2000 (RUT) finished with minor losses.

The Regional Bank HOLDRS (RKH), Broker/Dealer Index (XBD), and AMEX Pharmaceutical Index (DRG) led while the Amex Networking Index (NWX), Amex Biotech Index (BTK), and Amex Gold Bugs Index (HUI) lagged.

My midday post noted that this was a relatively quiet day and the pop back to flat only cemented that view. The sector graph does show a slight downside bias but only the 3 groups listed above lost more than 1%. The rest of the action was mostly muted. As I mentioned earlier, I still want to see S&P 500 and Nasdaq Composite post decisive breakouts but I don't see anything here that looks ominous. And that is where I will pick up in the morning. Have a nice evening.

Chart Courtesy of Thomson Reuters

Click here for symbol descriptions

Charts Courtesy of Thomson Reuters

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Bearish Speculation Ramps Up on American International Group, Inc.

Puts were the options of choice yesterday on American International Group, Inc. (AIG), as traders on the International Securities Exchange (ISE) bought to open 5,820 of these bearishly oriented bets. For comparison's sake, speculators on the ISE purchased just 1,745 calls on AIG during the course of Tuesday's trading.

The day's downbeat bias was part of a growing trend on AIG, which has garnered a 10-day ISE put/call volume ratio of 0.86. This reading ranks in the 72nd annual percentile, indicating that traders are buying puts over calls at a faster pace than usual.

Taking a closer look at Tuesday's trading, put players opted for the November 34 strike. This option saw 7,076 contracts cross the tape, sending implied volatility up 3.6%. Open interest rose overnight from 11,811 contracts to 14,528 contracts, confirming that new bearish positions were added at this out-of-the-money put strike.

Elsewhere within yesterday's option volume, another pessimistic player opened a synthetic short position by purchasing 2,500 December 40 puts and selling an equal number of December 40 calls.

On the charts, AIG is certainly worthy of some skepticism. The famously volatile stock has skidded lower since late September, falling under steady pressure from its formerly supportive 10-day, 20-day and 40-day moving averages.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Bears Scramble to Cover Their Bets on RadioShack Corporation

It seems as though investors across Wall Street are growing steadily more upbeat toward RadioShack Corporation (RSH). On Tuesday, for example, traders on the International Securities Exchange (ISE) bought to open 2,062 calls on the electronics retailer. By contrast, only 42 puts were purchased on the ISE, revealing a distinct bias for bullish bets over their bearish counterparts.

In fact, RSH's 10-day ISE call/put volume ratio now stands at 7.44, as speculators have snapped up more than seven calls for every put during the past two weeks. This ratio ranks higher than 92.1% of other such readings taken within the previous year, suggesting that traders have rarely purchased calls over puts at a faster clip.

However, there could be an ulterior motive behind this call buying. Short interest on the stock has been steadily falling in recent weeks as RSH races up the charts, with the number of shares sold short tumbling by 34.2% during the past month. With more than 8% of the equity's float still dedicated to short interest, the remaining bears could be scrambling to buy calls in order to hedge against an extended rally.

On the charts, the shares are currently knocking on the $20 level. The stock caught a major boost earlier this month after RSH announced plans to begin carrying Apple's (AAPL) iPhone, which many analysts have cited as a positive catalyst for the retailer.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Midday Market Check - The Dow Jones Industrial Average Drops 35 Points

We head into the second half of the session with the Dow Jones Industrial Average (DJIA) down 35 points. The S&P 500 (SPX), Nasdaq Composite (COMP), and Russell 2000 (RUT) are holding mild-to-moderate losses.

Today's strongest groups are the Regional Bank HOLDRS (RKH), Amex Gold Bugs Index (HUI), and US Oil Fund (USO). The Amex Biotech Index (BTK), Amex Networking Index (NWX), and Semiconductor HOLDRS (SMH) are the weakest areas.

I ended yesterday saying that the overall action seemed to be constructive. Today's lackluster action isn't helping the S&P 500 and Nasdaq Composite to achieve the decisive breakouts I said I wanted to see but it isn't really hurting the technical picture either. With most sectors staying within 1% of the breakeven line, I would call this another quiet day. At least so far.

Chart Courtesy of Thomson Reuters

Click here for symbol descriptions

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Option Skews - Relatively Heavy Call Activity on EMC Corp and Chesapeake Energy Corp

Here are the stocks that saw a bias toward call activity in the previous session. This filtered scan is based on the International Securities Exchange (ISE) buy-to-open data. It looks for stocks where the previous day's call volume on the ISE is at least twice as great as the put volume. It then sorts the stocks based on the call volume. Since this is buy-to-open data, this can be a good source for finding stocks where optimism is emerging. Of particular interest to me would be situations where we see call activity on stocks that are still in intermediate-term downtrends. This would be a potentially cautionary sign from the contrarian perspective.

Companies included in today's scan results: SPDR Gold Trust (GLD), EMC Corp. (EMC), Target Corp. (TGT), Apple Inc (AAPL), Chesapeake Energy Corp (CHK), DryShips Inc. (DRYS), AnnTaylor Stores (ANN), Hecla Mining (HL), Exxon Mobil (XOM), Morgan Stanley (MS), General Electric (GE), MasterCard Incorporated (MA), Barrick Gold (ABX), Smith International (SII), Pfizer (PFE), MGM Mirage (MGM), Verizon Communications (VZ), Dell Inc (DELL), ASSURED GUARANTY (AGO), Brocade Communications Systems (BRCD), Petroleo Brasileiro SA (PBR), Alkermes (ALKS), The DirectTV Group Inc (DTV), Newmont Mining (NEM), Radioshack (RSH).

EMC Corp and Chesapeake Energy Corp are the charts that stood out to me -

• My last look at EMC's chart revealed the stock was working off an overbought reading but was extended from support. The current daily chart shows being overextended didn't bother the bulls. The shares recently pushed to a new annual high and then pulled back to near-term support.
• Earlier this month, we saw that Chesapeake Energy was trying to stabilize near support. The updated daily chart shows the stock managed a small bounce but then sellers stepped back in. In my view, the low from earlier this month is the key short-term level that needs to hold.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Option Skews - Relatively Heavy Put Activity on Fuqi International Inc and Cypress Semiconductor Corp

Here are the stocks that saw a bias toward put activity in the previous session. This filtered scan is based on the International Securities Exchange (ISE) buy-to-open data. It looks for stocks where the previous day's put volume on the ISE is at least twice as great as the call volume. It then sorts the stocks based on the put volume. Since this is buy-to-open data, this can be a good source for finding stocks where skepticism is emerging. Of particular interest to me would be situations where we see put activity on stocks that are still in intermediate-term uptrends. This would be a potentially encouraging sign from the contrarian perspective.

Companies included in today's scan results: SPDR Trust Series I (SPY), American International Group Inc (AIG), IBM (IBM), CIENA Corp. (CIEN), Express Scripts (ESRX), Peabody Energy (BTU), Alpha Natural Resources, Inc. (ANR), Aeropostale Inc (ARO), Fuqi International Inc (FUQI), Cypress Semiconductor Corp (CY), Frontline. (FRO), Gap (GPS), Saks Incorporated (SKS), AngloGold Ashanti. (AU), American Express (AXP), PDL BioPharma (PDLI), Massey Energy (MEE), American Axle & Manufact. Holdings Inc (AXL), Whole Foods Market (WFMI), Lincare (LNCR), Cadence Design Systems (CDNS), Philip Morris International Inc (PM), Johnson & Johnson (JNJ), ITT Educational Services (ESI), Baker Hughes Incorporated (BHI).

Fuqi International Inc and Cypress Semiconductor Corp are the charts that stood out to me -

• As the weekly chart shows, Fuqi International has given traders a wild ride this year. The shares surged from their March lows near 4 to more than 32 by September and then staged a pullback that has stabilized near 20. While the current selloff looks extreme, I think it has to be taken in the context of the rally. In other words, big rallies can be followed by big pullbacks. I don't really see much in the way of obvious support nearby but that isn't uncommon in this sort of breakout/momentum situation. The daily Relative Strength Index (RSI) recently hit an oversold reading and the weekly measure has worked off the overbought condition so I would be looking for signs that buyers were starting to return. A warning sign though would be a break of the recent lows.
• The daily chart of Cypress Semiconductor is showing some potential signs of life. The equity recently pulled back to support near 8 and hit an oversold condition. Buyers then stepped in and bounced the shares. The pop has pushed the stock to a short-term overbought condition and leaves it at the upper end of the downtrending channel in place off the July peak. The action here will give a good clue as to whether this was just an oversold bounce or a return of sustained buying demand.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Stocks Advancing Amid Heavy Short Interest - Amcore Financial Inc, Sina Corp, MBIA Inc, Cell Therapeutics Inc, Palm Inc

As explained in our education section, short interest is a useful sentiment indicator that measures the level of investor pessimism toward a stock. While it isn't always a simple "long only" indicator, it can give you insight into situations where you might see concentrated buying demand. The purpose of this post is to highlight heavily-shorted stocks that could be in the midst of a potential short covering rally. More details about the methodology are listed below.

Companies included in today's scan are: Amcore Financial Inc (AMFI), Sina Corp (SINA), Dress Barn (DBRN), Dillard's (DDS), Trex (TWP), Barnes & Noble (BKS), Media General (MEG), CIENA Corp. (CIEN), MBIA Inc (MBI), Cell Therapeutics Inc (CTIC), Palm Inc (PALM), Massey Energy (MEE), Hecla Mining (HL), Veeco Instruments (VECO), Jazz Pharmaceuticals, Inc. (JAZZ), First Midwest Bancorp (FMBI), Century Aluminum (CENX), MGM Mirage (MGM), Boston Private Financial (BPFH), Ascent Solar Technologies Inc (ASTI), Sotheby's Holdings (BID), Saks Incorporated (SKS), Susquehanna Bancshares (SUSQ), Metabolix, Inc. (MBLX), USEC (USU).

Methodology - the query scans my database of companies which has some basic filters to eliminate stocks that don't trade frequently. The table above is a filtered list of stocks that have at least 10 percent of their float sold short and showed a gain in the previous trading day. I use this as a tool for finding situations where stocks with heavy short interest have begun to move.

Like this post?

If so, you can get it delivered to your inbox every day. To try it, simply click here and sign in with your Schaeffer's username and password. (If you don't have a Schaeffer's Plus account, you can create one in just seconds by clicking here - it is free.) Once on the alerts page, select "phrase" from the first drop down box, select "intraday", and enter "Stocks Advancing Amid Heavy Short Interest" into the third box. You can repeat that process for other regular posts or change the setting to "author" and enter "Nick Perry" to get all the posts. Just remember, I make multiple posts a day so you will get numerous emails if you select intraday...

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Stocks Showing Unusually Heavy Volume - NeurogesX Inc, Tween Brands Inc, Assured Guaranty Ltd, SunPower Corp

Here are the results for today's unusual stock volume scan. The scan looks at the previous day's volume and compares it to the recent average volume. It then sorts the stocks based on those that showed the biggest increase (the "unusual" part) in volume.

Companies included in today's scan are: deCODE genetics (DCGN), Kingsway Financial Services (KFS), NeurogesX Inc (NGSX), Tween Brands Inc (TWB), Teekay LNG Partners L.P. (TGP), Pacific Sunwear of California (PSUN), Crystallex International (KRY), InterMune (ITMN), Assured Guaranty Ltd (AGO), Jacobs Engineering Group (JEC), Nabi Biopharmaceuticals (NABI), EXPRESSJET INC (XJT), SunPower Corporation (SPWRA), Thoratec (THOR), Netlist, Inc. (NLST), DynCorp International Inc. (DCP), Pharmasset, Inc. (VRUS), Dress Barn (DBRN), Smith International (SII), Sina Corp. (SINA), CAPITALSOURCE INC (CSE), Zumiez Inc. (ZUMZ), North American Palladium (PAL), Canadian Solar Inc. (CSIQ), China Sunergy Co., Ltd. (CSUN).

These are the top stocks from today's scan, which has some basic filters to eliminate stocks that don't trade frequently. A description of the column headings is below.

• Move Previous Day - yesterday's percent return.
• Volume Increase - looks at the previous day's volume and compares it to the recent average volume. It then sorts the stocks based on those that showed the biggest increase (the "unusual" part) in volume.
• Close - yesterday's closing price.
• Total Ratings - number of analysts who track the stock, according to Zacks.
• Buy Percent - percent of the analysts who rate the stock as a "buy". I use this to help gauge sentiment and potential buying demand. If everyone already loves a stock, that means a steady stream of new money will need to enter the stock to fuel a rally.

Note - sentiment data is current as of the previous trading day...

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx

Futures on the Dow Jones Industrial Average Suggest a Flat Open

Good morning everyone - welcome to the middle of the trading week. We start the day with stock futures more or less flat. The S&Ps are within a point of fair value. As they stand now, futures on the Dow Jones Industrial Average (DJIA) are suggesting an opening gain of less than 10 points.

 Email to a Friend

 Del.icio.us

 Facebook

 Reddit

 Newsvine

 Digg

 Mixx