LinkedIn Corp (NYSE:LNKD) popped yesterday -- and closed north of a key moving average -- on rumors of a possible Icahn stake. The shares are extending this run today, up 3% at $206.75. The positive price action has call players flocking to the equity's options pits, with the contracts changing hands at two times the average intraday pace. Meanwhile, LNKD's 30-day at-the-money implied volatility is up 5.6% at 27.3%, signaling elevated demand for the stock's near-term options.

Drilling down, LNKD's weekly 6/5 205-strike call has seen the most action. It seems safe to assume new positions are being purchased here for a volume-weighted average price (VWAP) of $2.10, making breakeven ahead of this Friday night's expiration $207.10 (strike plus VWAP). Earlier, the equity topped out at an intraday high of $207.19.

More broadly speaking, call players have set up camp in LNKD's options pits for some time now. For starters, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.94 ranks in the 92nd annual percentile. Plus, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.84 sits lower than 84% of all similar readings taken in the past year, meaning short-term speculators are more call-heavy than usual.

Meanwhile, LinkedIn Corp (NYSE:LNKD) could continue to garner some attention tomorrow. Specifically, the company is slated to host its annual shareholder meeting, beginning at 1 p.m. ET.

Although the earnings docket is light, a number of speeches from Federal Reserve officials and a slew of data points -- concluding on Friday with the highly anticipated jobs report -- will provide a wealth of information for traders to chew on. Meanwhile, among the few names making their way into the earnings confessional are Ciena Corporation (NYSE:CIEN), Dollar General Corp. (NYSE:DG), VeriFone Systems Inc (NYSE:PAY), and Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE).

Below is a brief list of some key market events scheduled for the upcoming week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

Monday, June 1

Personal income and spending, Markit's purchasing managers index (PMI), the Institute for Supply Management's (ISM) manufacturing index, and construction spending will kick off a busy week of economic data. A number of Fed speakers will take the stage throughout the week, as well, with Boston Fed President Eric Rosengren kicking things off Monday morning. There are no earnings reports of note.


Tuesday, June 2

Auto sales and factory orders will be released on Tuesday. Ambarella (AMBA), Conn's (CONN), Cracker Barrel (CBRL), DG, Guess? (GES), and Medtronic (MDT) will report earnings.

Wednesday, June 3

Jobs data starts to roll in on Wednesday, with ADP's employment report. International trade data, the ISM's non-manufacturing index, the weekly crude inventories update, and the Fed's Beige Book are also slated for release. Chicago Fed President Charles Evans and St. Louis Fed President James Bullard are scheduled to speak. Five Below (FIVE) and Vera Bradley (VRA) will step up to the earnings plate.

Thursday, June 4

Thursday's docket features weekly jobless claims, productivity and labor costs, as well as a speech from Fed Governor Daniel Tarullo. Analogic (ALOG), CIEN, Diamond Foods (DMND), J. M. Smucker (SJM), Joy Global (JOY), Lands' End (LE), PAY, and Zumiez (ZUMZ) are scheduled to unveil their earnings reports.


Friday, June 5

The Labor Department's nonfarm payrolls report will be in focus on Friday, as will an early afternoon speech from New York Fed President William Dudley. YGE will tell all in the earnings confessional. Additionally, Friday marks the deadline for Greece's first payment of four in June to the International Monetary Fund (IMF).

Have you ever considered the different technical indicators (e.g., MACD, RSI, Bollinger Bands) and wondered which ones work the best? I'll try to answer that this week by looking at how these indicators have performed over the past few years for stocks that trade in the S&P 500 Index (SPX). Also, I'll show a list of stocks that have recently signaled for the best-performing indicators. 

The Indicators I Evaluate: Below are some of the indicators that I looked at. Keep in mind that different traders use these indicators differently. That could be a reason no one tries to quantify their performance. I am taking a very basic approach to what I call a buy signal.

• RSI: The RSI (Relative Strength Indicator) is an oscillator that ranges from zero to 100. A low-number reading suggests a stock is oversold and ready to bounce. A typical buy level for this indicator is 30. Because stocks can stay oversold for an extended period of time, the buy signal is defined as when the RSI goes from below 30 to above 30. In other words, it was oversold and is now heading upward. 
• MACD: The MACD (Moving Average Convergence/Divergence) is calculated using the difference in two different moving averages for a stock. A moving average of that difference is then used and called the signal line. A common buy signal is generated when the MACD crosses above that signal line.
• Golden Cross: A golden cross is when a shorter-term moving average crosses above a longer-term moving average. In the analysis below, I used a 50-day and 200-day moving average.
• Moving Average Crossover: This is simply looking at the stock price crossing above a certain moving average.  I compared returns after the price crossed above the 50- and 200-day moving averages.
• Bollinger Bands: These use a moving average, and then bands are placed two standard deviations above and below the moving average. When the stock price touches the lower band, it is often considered oversold -- and a bounce in the stock price is expected.
• Moving Average Pullbacks: For a stock on the rise, some traders might wait for a pullback to enter the position. One popular way to define a pullback (which is then a buy signal) is when the stock falls to within a range of a rising moving average. I consider pullbacks to the 50-day and 200-day moving averages.

Quantified Data Since 2012: Going back to 2012 and looking at the stocks currently in the SPX, I determined when buy signals occurred (as defined above), and then found the stock's return over the next month (21 trading days, to be specific). The table below summarizes the returns for each signal.

Stocks pulling back to their 200-day moving average showed the best short-term returns, averaging a gain of 2.65%. Also, 69.3% of the returns were positive. The next best technical signals were the Bollinger Bands and the RSI. Both of those signals generated returns of over 2% over the next month, and at least 60% of the signals were positive. 

 

Returns by Year: These technical indicators fall in and out of favor, so I broke down the returns by year. The table below shows the average return following the signals, for each year since 2012. As you can see, the 50-day moving average crossover was the best signal in 2012, but so far in 2015 it has been the worst. The RSI was the best signal in 2014 and has continued to be the best so far this year. The 200-day moving average pullback, which has been the best overall since 2012 (see above), has been very consistent. The worst average return for that indicator came in 2012, averaging a gain of 1.63% over the next month of trading. 

 

Recent RSI & 200-Day Moving Average Pullback Signals: The analysis above shows the RSI and 200-day moving average pullbacks have been the best signals as of late. A list of recent signals might be a pretty good starting point to evaluate some short-term trade ideas.

We saw a huge CBOE Volatility Index (VIX) surge yesterday morning. Our favorite fear-and-greed proxy jumped 15% out of the gate, which -- I will admit -- is pretty noteworthy no matter when it happens. It's especially interesting given that while the market was weak, it was far from an implosion. We dropped about 0.6% in the early trade.

The cause? Let’s call it "economic numbers that moderately beat expectations." Yes, the Fed might now tighten in four months instead of five months. Or "Greece"! Or ... I don’t really know; it really doesn’t matter. The point is, "Volatility is Exploding ... Time to Go To the Mattresses."

That is, until you put some context around it all. So please allow me to provide some context around it all.

VIX closed Thursday at a six-month low, and then was basically unchanged on Friday. In fact, this was almost exactly a six-month low. The last time we closed lower was on Nov. 26, the day before Thanksgiving. The fact that we last hit a local low on the session before a holiday, and now we did it again right before a holiday, is -- of course -- not a coincidence.

We mention this often, but it's worth noting again: On most occasions, VIX understates the "real" implied volatility ahead of long weekends, and then gives a much more accurate reading after the holiday. Options themselves have time value, and no one want to pay up for relatively worthless time (i.e., a long summer weekend).

Thus, it all leads to a misleading rally in VIX following the weekend, when it's viewed in percentage terms. The iPath S&P 500 VIX Short-Term Futures ETN (VXX) is a terrible product to own, as we all know too well. But around holidays, it's a decent proxy for volatility, as it doesn't really have the same calendar quirks. And it "only" lifted about 2.5% in the early trade. In short time frames, VXX tends to move about half of VIX, so that suggests the "real" VIX pop was more like 5% ... and the rest was likely more about the weekend.

But alas, we need even more context. The VIX lift took it all the way back to 14. That’s still low historically, but that’s actually a bit higher than we’ve seen lately. In fact, it's been just about three weeks since the last close with higher than a 13 full, and we can't blame that all on worries about paying weekend decay at the end of the month. So while the one-day percentage pop overstates the VIX move, the actual level of VIX does suggest we have a bit more fear than we’ve seen lately.

I’m not sure what's going to keep a fear spike going as we head into summer -- it's not a time of year we tend to see much of anything interesting. But hey, you never know!

Disclaimer: Mr. Warner's opinions expressed above do not necessarily represent the views of Schaeffer's Investment Research.

ITT Educational Services, Inc. (NYSE:ESI) is having a banner day, soaring 75% to trade at $4.22. Not surprisingly, the stock's options pits are hopping, with total intraday volume running at 23 times what's expected.

One of ESI's most active options is the June 3 call, and Trade-Alert confirms one speculator bought to open a sweep of 2,309 contracts for $0.45 apiece, minutes after the open. In other words, this traders paid a total of just over $100,000 (premium paid * number of contracts * 100 shares per contract), expecting the shares to topple $3.45 (strike plus premium) by June expiration. At the time of the trade, ESI was lingering near $2.56, and with the bid on this strike currently at $1.21, it looks like the early morning buyer has already made a healthy profit.

Shifting gears, short sellers have been keyed in on ESI for some time. Currently, three-fifths of the stock's float is sold short, representing more than six weeks of trading activity, at the average daily volume.

This bearish bias is understandable, given ITT Educational Services, Inc.'s (NYSE:ESI) woeful technical track record -- exacerbated by recent fraud charges. While the shares have surged today -- possibly on the firm's 2014 10-K filing -- they've surrendered 56% year-to-date, and earlier tested resistance at their 40-day moving average.

Analysts are weighing in today on smartphone concern BlackBerry Ltd (NASDAQ:BBRY), as well as semiconductor manufacturers Magnachip Semiconductor Corp (NYSE:MX), and Himax Technologies, Inc. (ADR) (NASDAQ:HIMX). Here's a quick look at today's brokerage notes on BBRY, MX, and HIMX.

• There's plenty of buzz surrounding BBRY today, which is down 1.3% at $9.90, after a Morgan Stanley analyst reiterated his "underweight" rating and $7 price target, and said the company's 2016 forecast is "unattainable." This mirrors the general outlook on the Street, where 16 of 19 brokerage firms say the stock is a "hold" or worse. Not only that, but 16.9% of BlackBerry Ltd's float is sold short, representing almost 11 days of trading, at its normal volumes. This widespread pessimism is interesting, considering the shares have added over 30% in the past year. From a contrarian standpoint, this skepticism could benefit BBRY, if it can resume its long-term uptrend.


• Topeka Capital upgraded its rating on MX to "buy" from "hold" today, following the company's impressive showing in the earnings confessional. The stock is still trying to make up ground after its massive mid-February bear gap, but the shares have outperformed the S&P 500 Index (SPX) by nearly 14 percentage points in the past three months. Plus, they're soaring today, last seen 13.5% higher at $7.25. Put buying has still been more popular than normal in recent months. Magnachip Semiconductor Corp's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.28 is higher than more than three-fourths of readings from the past year.


• HIMX is 4.8% lower today at $6.22, with a downgrade to "sell" from "neutral" -- and price-target cut to $4 from $5 -- at Chardan Capital weighing on the shares. Specifically, the brokerage firm said Samsung could possibly migrate from HIMX LCD display drivers to AMOLED displays. Even before today, the equity was 19% below its year-to-date breakeven level, and short sellers have been piling on. Short interest increased 52.8% during the two most recent reporting periods, and it would now take over four days to buy back all the shorted shares, at Himax Technologies, Inc.'s average daily volumes. Things are more bullish in HIMX's options pits, though. During the past 50 days at the ISE, CBOE, and PHLX, over 17,000 calls have been bought to open, versus fewer than 400 puts.

QUALCOMM, Inc. (NASDAQ:QCOM) is flat today at $70.60, but that hasn't stopped option bulls. More than 38,000 calls have crossed so far -- twice the expected intraday amount -- versus only 5,000 puts. The most popular contracts are the weekly 5/29 70.50- and 71-strike calls, which appear to be seeing buy-to-open action. This means traders are betting on extended gains above the respective strikes, ahead of the contracts' expiration at today's close.

This is just more of the same for QCOM traders, as call buying has been hot lately. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 6.25 is only 1 percentage point from an annual high.

The majority of brokerage firms have also taken a bullish stance. That is, 15 of 24 analysts tracking QCOM say it's a "buy" or better, versus nine "holds" and not a single "sell."

QUALCOMM, Inc. (NASDAQ:QCOM) hasn't really lived up to the hype, though. The shares have given back over 12% in the past year, and more recently have been pressured lower by their descending 40-week moving average. The company is also facing increased competition, due to yesterday's big buyout.

Eli Lilly and Co (NYSE:LLY) topped out at a 13-year high of $79.55 earlier -- and was last seen up 3.5% at $79.06 -- on reports the company is joining forces with AstraZeneca plc (ADR) (NYSE:AZN) to combine two of their respective cancer treatments for a new clinical trial. Option traders are responding in kind, scooping up calls at eight times the average intraday pace -- with a number of speculators betting on higher highs in the next few weeks.

Specifically, LLY's June 80 call has seen the most action, and it seems safe to assume new positions are being purchased here. By initiating the long calls, traders are gambling on LLY to break through the round-number $80 mark -- a feat not accomplished since early 2002 -- by the close on Friday, June 19, when front-month options expire.

From a broader perspective, today's accelerated call volume just echoes the withstanding trend seen in LLY's options pits. In fact, the equity's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 3.11 ranks in the 86th percentile of its annual range.

Technically speaking, Eli Lilly and Co (NYSE:LLY) has put in a strong performance over the long term -- up 32% year-over-year, thanks to several sharp bounces off its 120-day moving average. More recently, the shares have outperformed the broader S&P 500 Index (SPX) by 7 percentage points over the past three months.

Insurance issue Humana Inc (NYSE:HUM) skyrocketed in early afternoon trading -- and was temporarily halted -- thanks to reports the company could receive a buyout offer from one of its peers, possibly Aetna Inc (NYSE:AET) or CIGNA Corporation (NYSE:CI), soon. After topping out at an all-time high of $219.79, HUM was last seen 20.4% higher at $214.60, and it looks like at least one short-term bull is about to bank. 

HUM calls have now traded at four times the average intraday clip, and have roughly doubled put volume thus far. The security's 30-day at-the-money implied volatility edged 10.1% higher to 38.4% -- which puts it in the 100th percentile of its annual range.

Digging deeper, it looks like one prophetic trader rolled the dice just in time to capitalize on HUM's rally. At 1:10 PM ET -- when HUM was trading around $177 -- several blocks of 5/29 180-strike calls were presumably bought to open across a number of exchanges. The calls were bought for $0.25 apiece, making breakeven ahead of tonight's expiration $180.25 (strike plus premium paid). Within 10 minutes, HUM was well north of $200.

Since the takeover rumors emerged, HUM's longer-term options have drawn interest. It looks like some traders may be liquidating their now deep-in-the-money August 175 calls, while others are initiating fresh positions at the weekly 6/5 210-strike call, to gamble on an extended rally north of the strike through next Friday's close, when the options expire.

Prior to today, HUM puts were the options of choice. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.15 stands higher than 73% of all other readings from the past year, pointing to a healthier-than-usual appetite for bearish bets of late. 

Echoing that, Humana Inc's (NYSE:HUM) Schaeffer's put/call open interest ratio (SOIR) is docked at 2.78, suggesting short-term puts outnumber their call counterparts by a nearly 3-to-1 margin. What's more, this ratio sits in the 99th percentile of its annual range, showing that near-term traders have rarely been more put-biased during the past year. 

Biotech stocks have been red hot lately, and today is no exception. Two names within that sector seeing sizable upside this afternoon -- and attracting attention from option bulls -- are ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) and Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA).

ACAD is up 3.3% at $41.50 -- after taking a bounce off its 10-day moving average -- and now sports a year-to-date lead to 31%. Meanwhile, the security's calls are flying off the shelves at triple the expected intraday rate and 22 times the pace of puts. Digging deeper, traders are buying to open ACAD's in-the-money July 40 call, anticipating additional upside through the close on Friday, July 17, when back-month options expire.

Today's bullish bias is business as usual for the drugmaker. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), more than eight ACAD calls have been bought to open for every put. The resultant call/put volume ratio of 8.43 ranks in the top one-third of comparable readings from the last year.

Shifting our focus to ARIA, the shares are up 2.1% at $9.19, and currently sport a year-to-date advance of almost 34%. Calls are being exchanged at triple the normal intraday clip, powered largely by activity at the July 10 strike. By buying to open these out-of-the-money calls, traders expect ARIA to muscle into double-digit territory -- for the first time since October 2013 -- by back-month expiration.

Unlike ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) has seen puts bought to open at a faster-than-usual rate recently. The latter's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.19 checks in higher than 77% of comparable readings from the previous year.

The tech sphere is buzzing with new developments today, including Amazon.com, Inc.'s (NASDAQ:AMZN) announcement that it will once again be expanding its same-day delivery service to certain Prime members, and reports that the company is in talks to develop its own line of food and household products. The headlines have AMZN trading higher, and eleventh-hour option players eyeing more upside through tonight's close.

Taking a quick step back, calls are trading at 1.4 times the average intraday pace. Weekly 5/29 options are in focus, with nine of AMZN's 10 most active strikes residing in this series. The stock's weekly 5/29 430-strike call has seen the most action, and according to the International Securities Exchange (ISE), there appears to be a mix of buy- and sell-to-open activity occurring here.

By purchasing new positions, traders expect AMZN to rally north of the strike by tonight's closing bell -- when the series expires. Meanwhile, by writing the calls to open, the goal is for the security to settle the week south of the strike. Earlier, AMZN hit an intraday high of $432.50, but hasn't closed north of $430 on a weekly basis since the first full week of May.

That's not to say AMZN hasn't been making technical inroads this year -- tacking on 38.4% to trade at $429.35. Meanwhile, in the options pits, call buying has been picking up speed in recent weeks. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Amazon.com, Inc.'s (NASDAQ:AMZN) 10-day call/put volume ratio of 1.32 ranks in the 73rd annual percentile.

Analysts are weighing in today on video game retailer GameStop Corp. (NYSE:GME), biotech firm Heron Therapeutics Inc (NASDAQ:HRTX), and network services provider Infoblox Inc (NYSE:BLOX). Here's a quick roundup of today's bullish brokerage notes on GME, HRTX, and BLOX.

• The company's first-quarter earnings beat and promising current-quarter forecast have GME gaining ahead of the open. The shares are pointed 6.8% higher, poised to add to their 21.1% year-to-date lead, after settling at $40.92 yesterday. On the Street, Wedbush and Ascendiant Capital each raised their price targets this morning, to $52 and $46, respectively. Most analysts are already bullishly aligned, with 11 of 15 calling GameStop Corp. a "buy" or better. Many traders have the opposite view. A stunning 44.8% of GME's float is sold short, which would take over two months to repurchase, at its average daily volumes.


• HRTX is exploding in pre-market trading, set to add 38% -- and hit four-year highs -- after the company announced its nausea drug achieved positive top-line results in its Phase 3 study. JMP Securities has since weighed in, raising its price target to $25 from $23. The Street is already behind the stock, as all four covering brokerage firms rate it a "strong buy." Additionally, Heron Therapeutics Inc's average 12-month price target of $25.80 is more than double that of the stock's close yesterday at $12.35. The shares have earned the bullish feedback, though. HRTX has added almost 23% in 2015.


• Strong fiscal third-quarter numbers have BLOX moving higher in electronic trading, last seen up 4%. The equity finished at $26.32 yesterday -- after hitting an annual high of $26.48 -- and has been stair-stepping higher for since mid-2014, adding over 28% year-over-year. Even with these gains, near-term option traders are more put-focused than normal. Infoblox Inc's Schaeffer's put/call open interest ratio (SOIR) stands at 0.53, only 2 percentage points from an annual high.