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Dow Jones Industrial Average Booms 225 Following Standout Jobs Report

How to Trade a Mean-Reverting SPY

Dec 4, 2015 at 12:06 PM
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The Dow Jones Industrial Average (DJIA) has surged following this morning's nonfarm payrolls release, which edged out economists' forecasts. The blue-chip barometer and its index peers are still set to close the week lower, however, with a December rate hike now all but a sure thing. Meanwhile, crude futures have turned lower, with the December contract again breaching $40 per barrel, following the Organization of the Petroleum Exporting Countries' (OPEC) decision to lift its production ceiling

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Among the stocks with notable put activity is energy infrastructure concern Kinder Morgan Inc (NYSE:KMI). Puts are changing hands at eight times the average pace, as energy stocks drop and after the stock received yet another bearish analyst note, with UBS last night lowering its price target to $39 from $43. One of the more popular options is the December 17.50 put, and it looks like traders are purchasing new positions here in hopes of extended losses for KMI. The stock was last seen 6.6% lower at $17.99, and just off a record low of $17.45. 

One of the leading laggards on the Big Board is fellow energy firm Chesapeake Energy Corporation (NYSE:CHK). The stock continues to explore new lows following OPEC's decision to raise crude oil production levels. At last check, CHK was 3.9% lower at $4.68, earlier hitting a fresh decade-plus low of $4.47. 

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Among the biggest gainers on the Nasdaq is video game creator Electronic Arts Inc. (NASDAQ:EA). Following an upgrade to "overweight" at Atlantic Securities, the shares have picked up 4.3% to $70.13, bringing their 2015 gains to 49.2%. However, it's not like this pop is entirely surprising

The CBOE Volatility Index (VIX) is 1.7 points, or 9.6%, lower, but is still set to close above its 10-day moving average for the second straight day. 

Today's put/call volume ratio on the SPDR S&P 500 ETF Trust (SPY) is 1.5, with puts outnumbering calls. The SPY is 2.7 points, or 1.3%, higher at $208.33

 

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