The busiest week of earnings season is upon us, and Tuesday's slate includes social media stock Twitter Inc (NYSE:TWTR), airline JetBlue Airways Corporation (NASDAQ:JBLU), and mining firm Freeport-McMoRan Inc (NYSE:FCX). Let's take a closer look at TWTR, JBLU, and FCX ahead of their earnings reports. 

• Starting with TWTR, call buying has been popular leading up to tomorrow evening's earnings report. The stock's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows almost three calls have been bought to open for every put. This apparent optimism comes despite the fact that TWTR has traded lower in its post-earnings session six of the past eight quarters -- include the last four in a row. What's more, the options market is pricing in a brow-raising 18.8% post-earnings swing this time around. 
  
  On the charts, Twitter Inc has been a long-term underperformer, dropping over 67% in the past 12 months to trade at $16.95. More recently, the shares have been hitting resistance around the $18 level, while contending with the descending 80-day moving average. Considering the optimism in the options pits along with this ugly technical backdrop, another earnings miss could spell trouble for TWTR, from a contrarian perspective.


• JBLU traders, meanwhile, are taking a more bearish route. Put volume is running 1.8 times above the average intraday rate today, thanks to heavy activity at the May 19 strike, where traders are buying to open contracts. As such, they're betting on JBLU falling below $19 before front-month options expire at the close on Friday, May 20. These bears may be anticipating a third straight post-earnings sell-off from the stock, which fell 6.3% after earnings in late January. Technically speaking, JetBlue Airways Corporation is down 10% in 2016, including a 0.5% drop today to trade at $20.34. In fact, the stock's last two breakout attempts were cut short by its 320-day moving average -- a level that previously acted as support. 


• After a huge week that saw the stock close atop its 50-week moving average for the first time since September 2014, FCX has fallen 3.8% today to $11.23. Nonetheless, shareholders are counting on a third straight post-earnings move to the upside after tomorrow morning's report, while the options market is pricing in a lofty 12.5% one-day swing. Elsewhere, short-term options traders have had their sights set on puts. For instance, Freeport-McMoRan Inc's Schaeffer's put/call open interest ratio (SOIR) comes in at 1.10, topping 73% of all other readings from the past year. Said simply, speculators targeting options that expire within three months are more put-skewed than normal. 

The 20 stocks listed in the table below have attracted the highest options volume during the past 10 trading days. Stocks highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Two notable names are biotech Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and energy stock Energy Transfer Equity LP (NYSE:ETE).

It's been a wild ride for VRX stock, as the firm tackles a number of fundamental blunders. Today, the stock was most recently seen down 1.6% at $35.42, after Valeant confirmed its replacement for exiting CEO Michael Pearson and said it has received more default notices following the delay of its annual reports. Longer term, VRX has shed almost 87% since topping out at an Aug. 6 record peak of $263.81.

In the options pits, traders have been growing increasingly skeptical of VRX. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, the stock's 10-day put/call volume ratio has more than doubled to 0.94 in the past two weeks, and now ranks in the bearishly skewed 68th annual percentile.

Drilling down, VRX's weekly 5/6 30.50-strike and May 30 puts have seen the biggest rise in open interest over this time frame, with 58,532 contracts added. Those buying to open the puts expect Valeant Pharmaceuticals Intl Inc to sink below the strike prices by the close at the respective expiration dates of Friday, May 6, and Friday, May 20.

ETE is off 4.6% today at $11.12, sinking in step with crude oil futures. This runs counter to the stock's longer-term trajectory -- even as skepticism builds over its proposed merger with Williams Companies Inc (NYSE:WMB) -- with shares of ETE up 178% from their Feb. 8 seven-year low of $4.00.

At the ISE, CBOE, and PHLX, meanwhile, 7.88 call options have been bought to open for every put option over the past 10 sessions -- a ratio that arrives in the 76th annual percentile. Plus, ETE's Schaeffer's put/call open interest ratio (SOIR) of 0.26 sits lower than 98% of all comparable readings over the past year, meaning short-term options traders have rarely been as call-heavy as they are now.

The stock's July 12.50 call has easily seen the most contracts added over this time frame -- 57,638 to be exact. According to the major options exchanges, a large portion of this activity is of the buy-to-open kind, suggesting options traders are eyeing a move above $12.50 for Energy Transfer Equity LP by front-month options expiration.

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Mobileye NV (NYSE:MBLY) puts are flying off the shelves once again today, at double the expected intraday rate, and triple the speed of calls. The most active strike is the May 40 put, and it looks like one options trader bought to open a sweep of 1,850 contracts for $2.90 apiece -- or a total of $536,500 (premium paid * number of contracts * 100 shares per contract). According to Trade-Alert, this may be the work of a MBLY shareholder hedging his long stock position against a post-earnings move lower after next Thursday morning's report.

Taking a step back, options traders have been extremely bearish toward shares of the auto technology firm. In fact, MBLY's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio comes in at an annual high of 5.65. Underscoring this put bias, the stock's Schaeffer's put/call open interest ratio (SOIR) of 2.42 rests just 8 percentage points from a 12-month peak.

Outside of the options pits, short sellers have also been piling on MBLY's bearish bandwagon. Over 22% of the stock's float is sold short, which would take 12.5 sessions to cover, at its typical daily trading levels. In fact, one famous short-selling firm recently described MBLY as the "most outrageously overpriced, overhyped semiconductor stock ever."

Technically speaking, Mobileye NV (NYSE:MBLY) has been a mixed bag in 2016. Year-to-date, the stock is off 8.8% at $38.55 -- including a 2.2% drop today. On the other hand, MBLY had been bouncing back since touching a record low of $23.57 in early February.

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Sarepta Therapeutics Inc (NASDAQ:SRPT) was halted before the market opened, as speculation continues to swirl surrounding the Food and Drug Administration's (FDA) decision on the company's muscular dystrophy treatment, eteplirsen. Just this morning, the FDA's director of drug evaluation, Janet Woodcock, told an FDA-approved panel that it could be harmful ​not ​to approve a drug that works  While this panel of experts will vote on whether the treatment should be approved, Woodock will ultimately have the final say, with a decision expected before or on May 26. 

As mentioned, SRPT has been halted today, and remains docked at its Friday settlement of $14.95. This closing price capped a huge day to end the week, wiht the stock jumping 35.7%, thanks to buzz surrounding today's FDA meeting. Still, the shares remain 61% lower year-to-date -- and gapped lower last Thursday on speculation surrounding the drug's approval.

As far as sentiment goes, Sarepta Therapeutics Inc (NASDAQ:SRPT) is surrounded by skepticism on Wall Street. For starters, short interest represents almost 43% of the stock's float, while nine out of 13 brokerage firms rate the stock a "hold" or "strong sell." Meanwhile, SRPT's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 0.58 rests just 14 percentage points from an annual high. 

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Analysts are weighing in on industrials interest Honeywell International Inc. (NYSE:HON), online retailer Alibaba Group Holding Ltd (NYSE:BABA), and electric auto stock Tesla Motors Inc (NASDAQ:TSLA). Here's a quick roundup of today's bullish brokerage notes on HON, BABA, and TSLA.

• No fewer than seven brokerage firms raised their price targets on HON over the weekend, after the company reported better-than-predicted first-quarter earnings on Friday, when the stock settled at $114.17. Jefferies set the highest target, at $130 -- in all-time-high territory for the stock, which hit a record peak of $116.56 last Tuesday. Honeywell International Inc. bounced off of its 40-day moving average at the end of February -- around the time the company dropped its pursuit of United Technologies Corporation (NYSE:UTX) -- and has since been bounding higher. Analysts seem to be impressed, as only one of the 14 providing coverage doesn't recommend buying the stock.

• BABA is pointed 0.4% lower ahead of the open, after closing Friday at $79.89. This, despite a price-target hike to $109 from $91 at Deutsche Bank. Longer term, though, the stock has added almost 35% since hitting a year-to-date low of $59.25 in February. Short interest remains elevated on BABA, but recent options traders may be eyeing more gains for the shares, with nearly three Alibaba Group Holding Ltd calls bought to open for each put over the past 10 sessions at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The corresponding call/put volume ratio of 2.87 ranks in the high 84th percentile of its annual range.

• Goldman Sachs increased its price target on TSLA to $245 from $202 -- still a discount to the stock's Friday finish at $253.75. More broadly speaking, a skeptical trend has been seen among other analysts. On the charts, Tesla Motors Inc is sitting 0.5% lower ahead of the bell. Still, the stock has outperformed the S&P 500 Index (SPX) by more than 21 percentage points over the last three months. Meanwhile, at the ISE, CBOE, and PHLX, TSLA's 10-day call/put volume ratio of 1.14 is higher than two-thirds of all readings taken in the past 12 months.

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Earnings and oil, with a bit of technical analysis tossed in. If you're wondering what that means, let's just say it's a quick description of last week. Last weekend, Iran decided to stand other global oil producers up at the Doha Oil Summit. Saudi Arabia didn't like that, so none of the nations agreed to freeze the supply of oil. This initially sent oil prices down sharply ahead of last Monday's open. Well, about 500 miles away, workers in Kuwait weren't happy with their pay, and decided to stop producing oil themselves. The strike might have helped oil prices rebound, because by the close on Monday, oil prices and U.S. stocks had reversed sharply off their lows and moved much, much higher.

The surge only lasted a couple of days, as the strike ended Wednesday and a U.S. government report showed a 2.1-million-barrel build in weekly inventories. This seemingly marked the mid-week top for oil prices and U.S. equities, as both slid lower through the end of the week.

As you can tell, the past week was a tale of two halves, with the SPDR S&P 500 ETF Trust (SPY - 208.97) surging higher early and falling late. Besides the underlying move in energy prices, it was one of the busiest earnings weeks of the season. Most companies continued to beat the lowered analyst expectations, but the reactions were quite mixed and didn't provide a major catalyst for a continuation of higher prices.

In the context of how far U.S. equities have come during the past few months, this type of jittery price action is not too surprising. The SPY is also running up against its November 2015 high and trading ever so close to its former all-time high, which is now sitting just a few points above its current level. The $210 area has been a real thorn in the side of the SPY for more than a year, so don't expect it to just open the door for higher prices without a little fight.

During the past 50 trading days, the S&P 500 Index (SPX - 2,091.58) has advanced more than 13%. Schaeffer's Quantitative Analyst Chris Prybal produced a good study highlighting the typical returns of the S&P 500 after such a strong rally. This is only the 29th time since 1972 -- and the first time since February 2012 -- this has happened. So, what happened next? Below are the results, but basically the market took a pause for a couple of weeks before continuing its uptrend. This doesn't guarantee anything, but still good information to have.

There have been some interesting developments related to sector rotation since the February bottom. With oil more than 70% off its lows, it makes sense that energy stocks have led the rally, netting a nearly 30% gain. Industrial and basic material stocks have also done very well, which has coincided with weakness in the U.S. dollar. Finally, on the back of a pretty strong earnings season so far, financial stocks -- as evidenced by the Financial Select Sector SPDR ETF (XLF - 23.55) -- are officially back in bull-market mode, after rallying +20% off their low.

One thing to keep an eye on in relation to energy, materials, and industrials is the U.S. dollar. Most of the products related to businesses are denominated in the U.S. dollar, so when it gets weak, these products get cheaper for customers. Lower prices usually mean higher demand, and it's not a coincidence that the U.S. dollar has been getting hit during this rally. Take a look at the chart below of the PowerShares U.S. Dollar Index (UUP - 24.65). It's currently bouncing off its lower channel, which coincides with price level support -- and it's showing strength to end the week. For the strength in these sectors to continue, most will want to see a break down below this support area.

On the flip side, the leaders in early 2016 -- utilities and consumer staples -- have underperformed, and have done so in a big way the past week. Each were down significantly during the past five trading sessions and broke below their intermediate-term uptrends. These charts of the Utilities SPDR ETF (XLU - 47.35) and the Consumer Staples Select Sector SPDR ETF (XLP - 51.96) are starting to look a little worrisome to me on a relative basis.

Checking in on a few sentiment readings, we have seen optimism come back to the market since the February bottom, but it's far from extreme at this point. Below is a chart based on data from the Investors Intelligence (II) sentiment survey, which compiles the market outlooks of more than a hundred newsletters. The blue line represents the percent of respondents who are bullish minus the percent that are bearish. Historically, we look at this figure to rise above 40% to mark extreme optimism, but it's only at about 25% right now.

The most recent BofA-Merrill Lynch fund manager survey was also interesting. Respondents to this survey are asked to contribute information about current holdings and it has traditionally been used as contrarian indicator. Allocations to U.S. equities remain near an eight-year low, even though they have outperformed international equities during the past 12 months.  

In addition, managers are still overweight cash and utility stocks and underweight energy, materials, and industrials. The main takeaway is that sentiment toward U.S. equities has improved relative to February, but is far from optimistic at this point.

Given the overhead technical worries and strong price action in recent months, a little speed bump or pause in action may be in order. With that said, this is the eighth rally to the $210 area by the SPY in the last 13 months. With the current sentiment backdrop and resiliency of the market, one would think eventually these previous highs have a good chance of being taken out.

Looking forward to this week's action, we can expect another steady dose of earnings reports, most notably from 3M (MMM), Lockheed Martin (LMT), Procter & Gamble (PG), AT&T (T), Chipotle Mexican Grill (CMG), Twitter (TWTR), Facebook (FB), MasterCard (MA), and Amazon.com (AMZN).  On the economic front, the Federal Reserve rate decision will be unveiled on Wednesday, along with the weekly crude oil inventory report. In addition, the advance reading on first-quarter gross domestic product (GDP) and inflation-related data will be released on Thursday and Friday, respectively.

Read More:

Indicator of the Week: Why Sentiment Matters After the Dow's Defeat of 18K

The Week Ahead: Fed in Focus; Apple, Facebook Earnings Due

Analysts are weighing in on wood and paper product specialist Resolute Forest Products Inc (NYSE:RFP), social media stock LinkedIn Corp (NYSE:LNKD), and bank stock Wells Fargo & Co (NYSE:WFC). Here's a quick roundup of today's bearish brokerage notes on RFP, LNKD, and WFC.

• RFP is 5.9% lower at $5.65, after RBC and CIBC both downgraded the stock, with the latter slashing its rating to "sector underperformer" from "sector performer" and lowering its price target to $5 from $6. Resolute Forest Products has been on a downtrend for the past year, with resistance at its overhead 150-day moving average blocking its latest attempt at a recovery. In fact, the shares haven't managed to close above this trendline in more than 52 weeks, and are off 25% in 2016 alone. Only one of the five analysts providing coverage recommends buying the stock, and the portion of RFP's total float wrapped up in short interest would take more than seven sessions to cover, at the equity's average daily volume.

• Wedbush cut its price target on LNKD to $130 from $200, but the shares are essentially flat, at $119.48. While analysts have been wary of the security -- which has been stuck in the $110 to $120 region since mid-February, and is currently facing resistance at its 60-day moving average -- option traders appear to be betting on a rally. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 1.96 ranks higher than 98% of all comparable readings from the last year. Looking ahead, LinkedIn Corp is due to report first-quarter earnings this Thursday.

• WFC is down 0.7% to $50.26, after a price-target cut to $58 from $60 at Nomura. Wells Fargo & Co reported quarterly earnings just above expectations earlier this month, helping the shares break out above former resistance, but WFC has seen only bearish attention from the brokerage bunch since. Option traders don't seem impressed with WFC, either. At the ISE, CBOE, and PHLX, the equity's 10-day put/call volume ratio of 1.18 is still parked in the 92nd percentile of its annual range.

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This week is chock-full of earnings reports, including highly anticipated quarterly numbers from Apple Inc. (NASDAQ:AAPL). A number of companies have already reported earnings this morning, and we'll be looking at two -- payment solutions specialist First Data Corp (NYSE:FDC) and copy concern Xerox Corp (NYSE:XRX). Not only will we review the firms' respective earnings results, but also the sentiment landscape in the options pits and beyond.

FDC reported adjusted per-share earnings of 24 cents for its first quarter, edging past the consensus view of 23 cents per share. Revenue, meanwhile, arrived at $2.8 billion -- well above the expected $1.7 billion. As a result, the stock is 5.7% higher at $13.74. Longer term, the shares have been consolidating  just above $13 for the past two weeks, and appear to have found a foothold atop their 80-day moving average.

Bearish betting has been rampant among options traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 11.70 FDC puts for every call during the last 10 sessions. As such, the stock's Schaeffer's put/call open interest ratio (SOIR) checks in at a top-heavy 3.96 -- indicating short-term put open interest nearly quadruples call open interest.

On the flip side, analysts have taken a glass-half-full approach toward First Data Corp. Eleven of 14 consider the stock worthy of a "buy" or better rating, with not a single "sell" opinion to be found. Plus, FDC's consensus 12-month price target of $15.91 stands at a 16% premium to current trading levels, and represents territory not charted since early January.

Shifting our focus to XRX, the company reported adjusted earnings 22 cents per share in the first quarter -- a penny below the Street's consensus estimate. The firm's revenue also fell 4.2% year-over-year due to lower printer sales and a stronger dollar -- although the $4.28 billion reported beat the average forecast. This morning, the stock has plunged about 11.5% to trade at $9.88, and is currently testing its 100-day trendline for the first time since early March.

At the ISE, CBOE, and PHLX, options traders have bought to open an astounding 12.17 calls for every put during the last four weeks, although this call-skewed backdrop is amid relatively low absolute volume. On the other hand, two-thirds of analysts consider Xerox Corp a "hold" or worse.

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Biotech stock Anavex Life Sciences Corp. (NASDAQ:AVXL) is breaking out this morning, after the drugmaker's Alzheimer's treatment reportedly allowed an Australian woman to regain the ability to play the piano. At last check, AVXL has surged 17.2% at $6.14, which should lift the spirits of bullish options traders.

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 4.3 AVXL calls for every put during the last 10 weeks. Underscoring this call-skew, AVXL's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.27. In other words, calls nearly quadruple puts among options set to expire in the next three months.

Meanwhile, short sellers have been turning tail. During the latest reporting period, short interest on AVXL plunged almost 15%. However, 8.6% of the stock's float remains dedicated to short interest, and it would take over seven sessions to cover, at its typical trading levels. Taking this into consideration, it's possible short sellers have been buying calls to hedge against unexpected breakouts -- like the one we're seeing today.

On the charts, today's bull gap has Anavex Life Sciences Corp. (NASDAQ:AVXL) on track for its highest daily finish since Jan. 4. Also, the biotech stock is now back in the black on a year-to-date basis, up 10.2%.

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U.S. stocks are lower with oil this morning. Among equities in focus today are biotech Perrigo Company plc Ordinary Shares (NYSE:PRGO), publisher Tribune Publishing Co (NYSE:TPUB), and oil supplier Halliburton Company (NYSE:HAL).

• PRGO is down 12.7% at $106.02, and just off a three-year low of $104.70, after losing CEO Joseph Papa to rival biotech Valeant Pharmaceuticals Intl Inc (NYSE:VRX). PRGO reportedly plans to replace Papa with current president John Hendrickson. The stock has been trending lower over the past year, and has underperformed the broader S&P 500 Index (SPX) by nearly 24 percentage points over the last three months. Perrigo Company plc Ordinary Shares -- which will host its annual shareholders meeting tomorrow -- could be vulnerable to a backlash from analysts. Currently, the stock is rated as a ‘”strong buy” by 10 of 17 analysts, with not a single “sell” in sight.

• TPUB is up an impressive 58% at $11.86, after rival publishing conglomerate Gannett Co Inc (NYSE:GCI) offered to buy Tribune Publishing Co for $12.25 a share, for a total value of $815 million, including current debt. Prior to today, the stock had underperformed the broader SPX by about 22 percentage points over the last 60 sessions. A few TPUB short sellers could be kicking rocks. Short interest represents more than 8% of the stock's total float, or about four days' worth of pent-up buying demand, at TPUB's average pace of trading.

• HAL is down 1.3% at $40.30. The oil-and-gas provider announced it would delay its earnings release until May 3, but noted that first-quarter revenue is down a year-over-year 40%, and said the company laid off over 6,000 employees last quarter. Some analysts believe the delay means the Baker Hughes Incorporated (NYSE:BHI) deal is off. Halliburton Company’s 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX) of 2.34 sits in the 96th percentile of its annual range, suggesting an especially bearish outlook among recent option buyers.

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Put buying has been more popular than normal on Apple Inc. (NASDAQ:AAPL) in recent weeks, as options traders have seemingly tempered their expectations ahead of the company's earnings report tomorrow afternoon. For example, AAPL's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 0.65, putting it in the 71st percentile of its annual range. 

Among the most popular options in today's trading is the May 100 put, and data suggests buy-to-open activity is taking place. If long positions are in fact being initiated here, traders are betting on AAPL falling back below $100 before front-month options expire at the close on Friday, May 20. 

Surprisingly, anyone buying premium on short-term AAPL options today can do so at a relative bargain -- despite tomorrow's quarterly earnings report. For example, the stock's Schaeffer's Volatility Index (SVI) of 28% sits near the bottom quartile of readings from the past year. In other words, the options market is pricing in lower-than-usual volatility expectations for AAPL. 

As far as earnings go, AAPL has traded lower in the session immediately following the release of its quarterly reports in three of the past four quarters -- including a 6.6% post-earnings slide in January. The options market is pricing in a similar move of 6.8% this time around, in either direction. Obviously, shareholders hope the stock can avoid the post-earnings fate of its fellow tech giants from last week.

AAPL has been sliding on the charts in recent weeks amid several downbeat reports about iPhone production. While the stock is still hovering around the $105 area that offered support in the latter half of March, the shares are positioned for yet another close below their 10-month moving average. 

It's more of the same today, with Apple Inc. (NASDAQ:AAPL) 0.9% lower at $104.72. The drop comes despite the company's dismissal of iPhone price-hike reports in India. Plus, AAPL was listed as one of major money managers' top picks for the next year in Barron's latest Big Money poll (subscription required), with 77% of those surveyed giving the stock a thumbs-up recommendation. 

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