Dow Jones Industrial Average Looks to Snap Losing Streak

How to Ride 'The Next Great Volatility Pop'

Jun 9, 2015 at 11:54 AM
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The Dow Jones Industrial Average (DJIA) is attempting to snap its three-session losing streak, but remains in the red year-to-date. The blue-chip barometer has traded on both sides of breakeven today, as Wall Street can't decide what to make of the latest economic data. Specifically, the Labor Department's Job Openings and Labor Turnover Survey (JOLTS) showed a record-high number of U.S. job openings in April -- good for the economy, but also a potential harbinger of a summer rate hike. Elsewhere, traders are eyeing a rise in wholesale inventories, a rebound in crude futures, higher bond yields, and the latest Greece headlines

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Among the stocks with notable call volume is Southwest Airlines Co (NYSE:LUV). The airline sector is extending yesterday's swoon, and LUV is no exception -- pressured by a disappointing passenger revenue forecast. While the stock is down 5% at $34.29, option traders are rolling the dice on a short-term rebound. Intraday call volume is running at three times the average pace, with buy-to-open action detected at the June 36.50 call. The call will move into the money if LUV climbs back atop $36.50 by the close on Friday, June 19, when front-month options expire.

One of the top gainers on the Nasdaq is Lululemon Athletica inc. (NASDAQ:LULU). The shares were last seen 5.9% higher at $65.15, after the yoga apparel maker reported solid earnings and lifted its full-year forecast. While option players yesterday were gambling on a post-earnings slide, both bulls and bears are initiating new positions today.

One of the top losers on the Big Board is Burlington Stores Inc (NYSE:BURL). The stock has surrendered 9.5% to sit at $48.76 after the retailer reported lackluster quarterly sales. BURL is poised for its biggest one-day drop since going public in October 2013. The stock is now testing a foothold atop its 200-day moving average.

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The CBOE Volatility Index (VIX) is down 0.4 point, or 2.4%, surrendering a perch atop the 15 level.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.79, with puts nearly doubling calls. At last check, the SPY is fractionally higher at $208.72.

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