Dow Jones Industrial Average Gains; Travel Stocks Slip

A Better Way to Trade Overbought VIX?

Nov 16, 2015 at 12:11 PM
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The Dow Jones Industrial Average (DJIA) is modestly higher at midday, bouncing back from pre-market jitters in the wake of last week's terrorist attacks in Paris. Another wider-than-expected contraction in the Empire State manufacturing survey is also failing to dampen investor sentiment. On the commodity front, crude oil has turned sharply lower on continuing oversupply concerns, while gold is getting a much-needed safe-haven lift after Friday's five-year low.

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Among the stocks with notable call volume is Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT), fresh off a major M&A announcement. Currently, the contracts are crossing at triple the expected midday rate, with buy-to-open activity detected at the out-of-the-money December 77.50 call.  Technically, HOT shares are down nearly 5% at $71.30.

One of the biggest decliners on the Nasdaq is retailer Urban Outfitters, Inc. (NASDAQ:URBN), down 9.3% at $22.20, and fresh off another three-year low of $22.11. The company this morning announced it will purchase the Vetri Family restaurant group, and will also report earnings after the close.

One of the leading losers on the Big Board is Vipshop Holdings Ltd (NYSE:VIPS), down 10.8% at $12.13, and earlier touching another annual low of $12.02. The e-tailer was hit by a trio of price-target cuts at Jefferies (to $23), HSBC (to $24), and Deutsche Bank (to $8.30).

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The CBOE Volatility Index (VIX) is down 0.3 point, or 1.5%, at 19.77.

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 2.22, with puts more than doubling calls. At last check, SPY is up 0.9 point, or 0.4%, at $203.40.

 

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