Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is flying high today, up 5.8% at $45.16. Boosting TTWO is a cryptic tweet from publisher Rockstar Games, which is owned by Take-Two Interactive, hinting at a sequel to its "Red Dead Redemption" game. In fact, with 6.26 million TTWO shares traded, stock volume has exceeded its previous 52-week peak of 6.18 million shares, hit on Feb. 4. The action is heating up in TTWO's options pits, as well, where volume is running at five times what's typically seen at this point in the day.

By the numbers, around 5,500 TTWO options have traded thus far, well above the average daily volume of 1,362 contracts. Puts have a commanding lead over calls, with 4,460 of the former and 1,061 of the latter on the tape at last check.

Drilling down, TTWO's October 44 put has seen the most action, though it's hard to tell whether positions are being opened or closed. More clear-cut activity has been detected at the stock's November 44 put, where it seems safe to assume traders are buying to open the options. If this is the case, the goal for put buyers is for TTWO to retreat back below $44 by the close on Friday, Nov. 18 -- when the back-month options expire.

Today's put-skewed trading is just more of the same in TTWO's options pits, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, TTWO stock has racked up a top-heavy 10-day put/call volume ratio of 5.30 across this trio of exchanges -- in the 86th annual percentile. Simply stated, puts have been bought to open over calls at a faster-than-usual clip, though some of them may have been of the protective sort.

While analysts have remained upbeat toward the stock, short sellers have been quick to bet against TTWO. In fact, despite dropping 6.5% in the two most recent reporting periods, nearly 16% of the stock's float is sold short. At the security's average pace of trading, it would take more than eight sessions to cover the remaining bearish bets.

Looking at the charts, traders' pessimism toward TTWO seems unwarranted. The stock is up 30% in 2016, and within striking distance of its Sept. 22 record high of $46.78. Plus, after Take-Two Interactive Software, Inc. (NASDAQ:TTWO) pulled back in the wake of notching this notable milestone, it quickly bounced near the $42 level -- home to its rising 80-day moving average, as well as its 20% year-to-date return mark. Should the equity continue to outperform, a capitulation from bearish options traders and/or short sellers could help fuel TTWO's fire.

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It's been a volatile past few days for Myriad Genetics, Inc. (NASDAQ:MYGN), and today is no different. The biotech stock is up 4.7% to trade at $19.51, ahead of tomorrow's start to the American Society of Human Genetics Annual Meeting in Vancouver -- where MYGN is expected to present data from four studies. As excitement for the conference ramps up, so too does action in the options pits.

At last check, roughly 3,400 puts were on the tape, or 33 times what's expected at this point in the session. What's more, puts are running in the 100th percentile of their annual range. In the lead by a mile is the November 15 strike, and Trade-Alert confirms buy-to-open activity. By scooping up these bearish bets, the options players foresee MYGN breaching $15 by back-month expiration, at the close on Friday, Nov. 18.

While the stock's options are generally traded lightly, calls have held the advantage. Take, for instance, MYGN's Schaeffer's put/call open interest ratio (SOIR) of 0.94, which ranks in the low 20th annual percentile. Long story short, open interest within the front three months is more call-tilted than usual, looking back at the last year.

However, there's hardly a bullish consensus around Myriad Genetics. Twelve of 14 analysts rate the stock a "hold" or worse. Not to mention, short interest has been soaring -- rising nearly 20% during the past two reporting periods. In total, 11.6 million shares -- or 29.5% of MYGN's float -- are sold short, which would take over two weeks to cover, at average trading levels.

There's a reason for the skepticism: Today's gains aside, Myriad Genetics, Inc. (NASDAQ:MYGN) has been stair-stepping its way lower for the better part of the last year. Over the previous 12 months, in fact, the shares have surrendered over half of their value, and touched a five-year low as recently as Oct. 13.

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Analysts are weighing in on energy stock Stone Energy Corporation (NYSE:SGY), burrito chain Chipotle Mexican Grill, Inc. (NYSE:CMG), and streaming music specialist Pandora Media Inc (NYSE:P). Here's a quick roundup of today's brokerage notes on SGY, CMG, and P.

• A downgrade to "underweight" from "equal weight" at Barclays has sent SGY spiraling 13.3% to trade at $9.25 -- making it one of the worst performing stocks on the New York Stock Exchange. The brokerage firm cited challenges in the offshore market, and said, "an eventual restructuring or reorganization transaction could result in substantial downside to the current equity value." Stone Energy Corporation is no stranger to bearish attention. In fact, not one of the seven brokerages following SGY recommends buying the shares. What's more, short interest currently represents more than 40% of the equity's total float. But this sentiment is hardly undeserved -- SGY has shed 86% year-over-year, and has now lost a foothold at the $10 level, which had been keeping losses in check for the last two months.

• CMG is off 2.4% at $394.41, after Nomura cut its price target on the stock to $372 from $405 -- representing a discount to current trading levels, and three-year-low territory. The brokerage also lowered its outlook for third-quarter same-store sales ahead of the company's earnings report, due out after the close next Tuesday, Oct. 25, explaining "third-quarter promotions ... do not appear to have had the desired effects." Technically, Chipotle Mexican Grill, Inc. is down 18% year-to-date, and has struggled below the $445 level for more than four months. Nonetheless, call buying has dominated the stock's options pits.

• P is on pace for its eighth consecutive daily loss, down 3.4% at $12.39, after BofA-Merrill Lynch slashed its rating to "underperform" from "neutral" and its price target to $9 from $14. An analyst at the firm called Pandora Media Inc's 2020 revenue target "difficult to achieve," noting the newest on-demand offerings from the company come "five years too late." Credit Suisse also weighed, cutting its price target on the stock by $2 to $14. The shares are off 7.6% year-to-date, and traders seem to expect more losses ahead. Nearly one-quarter of P's available float is sold short, or 10.1 times the stock's typical daily pace of trading. 

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U.S. stocks started last week on a quiet note, as banks and the Treasury market were closed Monday for Columbus Day. But things didn't stay calm for long, as third-quarter earnings season unofficially kicked off with Alcoa's (AA) disappointing report, long-term rates and the U.S. dollar continued to rise, and the Fed remained in focus as the September meeting minutes were released. Further adding to the mix of headlines was China's disappointing trade balance report for September. Add it all up, and we had a week of significant volatility that saw the S&P 500 Index (SPX - 2,132.98) down nearly 2% mid-week, but erasing most of those losses by Friday's close.

Currency and interest rate movements are not a new theme to tackle this week. Since the beginning of September, long-term interest rates have gained more than 13% and the U.S. dollar has gained nearly 2%. The increase in interest rates comes as more market participants expect the Federal Open Market Committee (FOMC) to raise interest rates at its December meeting. The CME Group 30-day fed funds futures currently predict a 64% probability of a December interest rate hike. (It's important to note that the Fed also has a meeting in early November, but most don't expect any changes just days ahead of the presidential election, and absent a scheduled press conference with Fed Chair Janet Yellen.) Meanwhile, currency fluctuations could be very important for multinational companies doing business overseas, which could be a theme for the third- and fourth-quarter earnings seasons.

Chart courtesy of StockCharts.com

Despite the recent developments in rates and currencies, the U.S. stock market had been stuck in a pretty narrow trading range over the past couple of weeks. In fact, the SPX experienced two inside weeks in a row coming into last week. An "inside week" occurs when the entire weekly price range for a given security falls within the price range of the previous week. Seeing two consecutive inside weeks is very rare. Like a coiling spring wound too tight, the SPX finally broke out to the downside this past week, and volatility climbed to a four-week high.

Chart courtesy of StockCharts.com

Speaking of downside, we are in the midst of a historically vulnerable time of year, as well. From a seasonality perspective, October has the worst average drawdown of all 12 months. "Drawdown" is simply the maximum intra-month loss for the SPX, and October averages a drawdown loss of -4.69% over the past 100 years. The key part of this statistic is that while October performance isn't good relative to other months, the average return for October is still positive, and it has a propensity to bounce back after experiencing a pullback.

Given the context of what has happened historically, the weak start to this month isn't a huge surprise, and neither was the mid-week reversal we experienced to end the week. There are some key technical areas that came into play, as well. As you can see in the weekly SPX chart posted above, a trendline connecting the higher lows since the February bottom was supportive during the week, and the index closed back above this level on Friday. In addition, the 2,100-2,125 area acted as resistance for the index on 11 occasions between February 2015 and July 2016. Since breaking above this former level of resistance, the SPX retested the area in September, and has now found support here two times.  

Another thing to keep in mind going forward is that seasonality may not be on our side right now, but things could be looking better right around the corner. November through April is the best six-month period for the stock market over the past 50 years, whereas May through October is the worst (going by average return). Dialing it in a little further, the next couple of months are historically strong, too. November through December is the second-best two-month time frame during the past 50 years, with an average gain of +2.60%.

From an options perspective, this week will end with the expiration of October-dated options. Peak put open interest remains at the 212 strike on the SPDR S&P 500 ETF Trust (SPY - 213.12), which Todd Salamone highlighted in last week's Monday Morning Outlook. This region held as support last week, and could remain a critical level if we retest the area this week. Any sharp break of this level may create delta-hedge selling, which acts as sharp downside pressure to stocks. On the flip side, with this level in the rearview mirror right now, the open interest configuration is actually rather supportive.

With third-quarter earnings season underway, most analysts are estimating an earnings decline of -2.1% for SPX companies, which would be the sixth consecutive quarter of year-over-year declines. The recent strength in the U.S. dollar could create a bit of a headache for some companies that do a lot of business overseas, which is something to look for in company conference calls. The forward 12-month price/earnings ratio for the SPX is at 16.7, which is higher than the five-year average of 14.9. Obviously, this can revert to the mean in two different ways: a price decline, and/or an earnings improvement.

It's also important to note that the energy sector has been the biggest drag on the SPX since late 2014. This quarter, energy companies are expected to have the highest revenue since late 2014. With oil prices surging recently, and trading near the round-number $50-per-barrel level, the sector could be at a critical juncture during the next two quarters. Given the strong impact energy stocks have had on the broad market, it is something to keep an eye on.

Chart courtesy of StockCharts.com

Looking ahead to this week's notable events, there are several big names on the earnings docket. Some of the most popular companies set to report are Bank of America (BAC), IBM (IBM), Netflix (NFLX), Goldman Sachs (GS), Intel (INTC), Yahoo! (YHOO), American Express (AXP), Verizon (VZ), Microsoft (MSFT), General Electric (GE), and McDonald's (MCD).  On the economic front, we'll also get industrial production, housing, and inflation data for the month of September. The combination of earnings releases, key economic reports, options expiration, and a pick-up in volatility should make for a very interesting week.

Continue reading:

• Indicator of the Week: Do These 13 Stocks Deserve Analysts' Acclaim? 


• The Week Ahead: Blue Chips Step Up to the Earnings Mic

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Markets in Asia had a mixed finish today, as crude oil traded mostly lower during the session. Gaming stocks in the region came under pressure after 18 Australian casino employees from Crown Resorts were detained by Chinese authorities for "suspected involvements in gambling crimes." China's Shanghai Composite shed 0.7%, with traders looking ahead to another data deluge due later this week, including the country's third-quarter gross domestic product (GDP) reading. Hong Kong's Hang Seng followed suit, dropping 0.8%.

Meanwhile, Japan's Nikkei added 0.3% as the yen weakened against the dollar, as the greenback rose on U.S. Fed Chair Janet Yellen's Friday remarks supporting a "high-pressure economy." The weaker yen gave a boost to exporters, including major automakers. South Korea's Kospi also closed higher, up 0.2%, after Galaxy Note 7 smartphone maker Samsung reversed early losses.

European stocks are in the red at midday, with traders taking a cautious stance ahead of a European Central Bank (ECB) meeting later this week. Investors are also digesting an in-line 0.4% increase in eurozone inflation last month. London's FTSE 100 was last seen off 0.6%. France's CAC 40 has shed 0.2%, and Germany's DAX is 0.3% lower, with shares of Deutsche Bank slipping again, as the company has yet to reach a settlement with the U.S. Justice Department.

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Asian stocks closed higher today, as crude oil prices continued to climb following Thursday's encouraging U.S. stockpiles report. Traders are shaking off yesterday's concerning trade data out of China, as the country today noted an uptick in inflation, with consumer and producer prices rising more than expected in September -- with the former marking its first year-over-year increase since January 2012. As such, China's Shanghai Composite added nearly 0.1%.

Elsewhere in the region, Japan's Nikkei tacked on 0.5%, as a weaker yen boosted exporters. South Korea's Kospi climbed 0.4%, as shares of Samsung Electronics jumped even after the smartphone maker said its recent Galaxy Note 7 woes would result in a $3.1 billion hit to its operating profits. Rounding things out, Hong Kong's Hang Seng ended the day 0.9% higher.

European markets are enjoying gains at midday, as banks shares surge and mining stocks get a lift from China's inflation data. Automakers are also in focus, after new car sales in the eurozone rose 7.3% in September. At last check, London's FTSE 100 is up 0.9%, Germany's DAX has added 1.6%, and France's CAC 40 is up 1.9%.

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Analysts are weighing in on video game stocks Activision Blizzard, Inc. (NASDAQ:ATVI), Electronic Arts Inc. (NASDAQ:EA), and Take-Two Interactive Software, Inc. (NASDAQ:TTWO). Here's a quick roundup of today's bullish brokerage notes on ATVI, EA, and TTWO.

• Oppenheimer started coverage on ATVI with an "outperform" rating, citing the company's edge in digital distribution. Speaking of outperformance, the stock has trekked a market-beating 11.5% higher year-to-date at $43.16, and late last month hit a record peak of $45.12. It's no wonder 11 of 15 analysts rate Activision Blizzard, Inc. a "buy" or better, compared to four "holds" and not a single "sell" opinion. Not to mention, ATVI's consensus 12-month price target of $48.04 stands at a healthy 11.3% premium to current levels.

• EA saw its price target bumped to $94 from $88 at Oppenheimer, reflecting the stock's long-term strength. Earlier this month, in fact, the shares touched an all-time peak of $86.07, and settled yesterday at $81.76, up 19% in 2016. An unwinding of heavy skepticism could fuel further gains for Electronic Arts Inc., too. For instance, the stock's 10-day put/call volume ratio of 1.42 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) registers just 10 percentage points from a 12-month high.

• Last of all, TTWO was initiated at Oppenheimer with an "outperform" rating, citing company initiatives and positive industry trends. The stock has shot 21.6% higher year-to-date at $42.35, and late last month notched an all-time best of $46.78. Suffice it to say, short sellers could be scrambling for cover. A lofty 15.6% of Take-Two Interactive Software, Inc.'s float is sold short, which would take more than eight sessions to buy back, based on average daily volumes.

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Analysts are weighing in on social media stock Facebook Inc (NASDAQ:FB), daily deals site Groupon Inc (NASDAQ:GRPN), and pharmacy firm Walgreens Boots Alliance Inc (NASDAQ:WBA). Here's a quick roundup of today's bullish brokerage notes on FB, GRPN, and WBA.

• Pivotal Research upped its price target on FB to $175 from $167, while Credit Suisse raised its outlook to $170 from $154, both marking record-high territory for the stock. It's hard to criticize the brokerage firms for their optimistic perspectives, considering the shares have soared 22.2% year-to-date at $127.88 -- thanks to a steady stream of positive news. And by no means are Pivotal Research and Credit Suisse the only ones on Facebook Inc's bullish bandwagon. In fact, 29 of 31 covering analysts rate the stock a "buy" or better, with not a single "sell" opinion to be found.

• GRPN is pointed 6.4% higher in pre-market trading, boosted by a bullish note from Wedbush. Specifically, the brokerage firm raised its rating to "outperform" from "neutral," and increased its price target to $6.50 -- in annual-high territory. Already, Groupon Inc shares have had a stellar 2016, running 63% higher to Friday's settlement at $5.01. Meanwhile, expectations have been building in the options pits. Based on data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open nearly 10 calls for every put over the last two weeks. GRPN's resultant 10-day call/put volume ratio of 9.83 outstrips 69% of all comparable readings from the past year.

• WBA hasn't had the best year, down 8% in 2016 at $78.31. But that didn't stop Jefferies from upgrading its assessment to "buy" from "hold," and lifting its price target to $95 from $87 -- near the stock's October 2015 annual high. On the other hand, Cowen slashed its price target on Walgreens Boots Alliance Inc to $95 from $102. Amid the mixed attention, the shares are up 1.6% in electronic trading, which could frustrate some recent put buyers. Specifically, WBA's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.20 ranks in the 71st annual percentile. Looking ahead, Walgreens will report earnings on Thursday morning.

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U.S. stocks are down as traders prepare for earnings season to pick up steam. Among equities in focus today are grocery stock SUPERVALU INC. (NYSE:SVU), financial firm Bank of America Corp (NYSE:BAC), and biotech Omeros Corporation (NASDAQ:OMER).

• SVU is up 3.2% at $5.17, after announcing the $1.37 billion sale of its Save-A-Lot business to private equity firm Onex Corp. Today's boost is a welcomed change of pace for SVU, which is still down over 23% since the beginning of the year, and has run out of steam several times in the $6.00-$6.20 range. In the option pits, SUPERVALU INC. sports a Schaeffer's put/call open interest ratio (SOIR) OF 0.20, which sits in just the 12th percentile of its annual range, suggesting near-term option players have rarely been more call-skewed over the last 12 months.
  
  
• BAC is trading 1% higher at $16.16, thanks to a well-received earnings report. Bank of America Corp shares have added 47% since their February low, and have spent the last several weeks near the $16 level, which has worked as a magnet for the shares. There's probably some option bears kicking rocks after BAC's earnings win, given BAC's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 0.38 sits higher than 78% of all other readings, indicating traders have been more bearish than usual in BAC's option pits.
  
  
• OMER is flying high, up 18.5% at $8.70, thanks to positive Phase 2 test results for its kidney disease drug. This is a much-needed win for the biotech, with Omeros Corporation hitting an annual low of $7.26 on Friday. There's likely some short sellers hitting the bricks after this latest move; even though OMER's short interest is down 3.3% over the last reporting period, shorted shares still account for nearly a quarter of OMER's float, which would take traders a whopping 37.5 days -- almost two months of trading -- to cover, at OMER's average daily volume.

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Analysts are weighing in on pharmacy operator CVS Health Corp (NYSE:CVS), doughnut dealer Dunkin Brands Group Inc (NASDAQ:DNKN), and social media stock Twitter Inc (NYSE:TWTR). Here's a quick roundup of today's bearish brokerage notes on CVS, DNKN, and TWTR.

• Deutsche Bank slashed its price target on CVS to $99 from $108. The stock is down 0.7% at $88.21, as it continues to fall ever since approaching $107 in early May. Given these losses, it would come as little surprise if CVS Health Corp were slapped with more negative analyst attention. Specifically, 80% of analysts rate the stock a "buy" or better, with not a single "sell" rating on the books. A round of downgrades could contribute to more selling pressure on CVS.

• DNKN has been cruising higher in 2016, but has taken a step back this morning after RBC cut its rating to "sector perform" from "outperform," though it bumped its price target to $54 from $51. Specifically, the stock is down 1.1% at $50.75, but is still sitting on a 19.2% year-to-date lead. Dunkin Brands Group Inc shares could swing on Thursday, with the company slated to report earnings ahead of the open. Options traders have been betting on a post-earnings move higher, too. Over the past 20 sessions, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open roughly 16 DNKN calls for every put.

• Last week's M&A letdown drilled TWTR, and those technical troubles are continuing today. Specifically, the stock is off 1.6% at $16.61, pressured by a price-target cut to $26 from $27 at Pivotal Research. In fact, since hitting a near-term high of $25.25 less than two weeks ago, Twitter Inc has surrendered about one-third of its value. All the while, the brokerage crowd has established a decisively negative outlook on the shares. By the numbers, 22 of 26 analysts covering TWTR rate it a "hold" or worse.

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Tesla Motors Inc (NASDAQ:TSLA) is 0.9% lower at $194.58, after CEO Elon Musk tweeted that TSLA's new product reveal, which was originally scheduled for today, has been moved back to Wednesday. Separately, TSLA said that -- pending the outcome of a Nov. 17 shareholder vote over its proposed merger with SolarCity Corp (NASDAQ:SCTY) -- it will work with Panasonic to produce solar sells and modules to use in its Powerwall and Powerpack energy storage products. In the options pits, calls are outpacing puts -- 9,070 vs. 6,169 -- echoing a recent trend on TSLA stock.

For instance, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), options traders have bought to open 50,265 calls in the past 10 sessions, compared to 44,106 puts. What's more, the resultant call/put volume ratio of 1.14 ranks in the 69th annual percentile, meaning calls have been bought to open over puts at a faster-than-usual clip.

Additionally, TSLA's Schaeffer's put/call open interest ratio (SOIR) of 1.00 ranks lower than 78% of all comparable readings taken in the past year. In other words, speculative traders are more call-heavy than usual toward options set to expire in three months or less.

In the front-month series, specifically, peak open interest of 14,797 contracts is currently located at TSLA's October 220 call. According to the major options exchanges, a healthy portion of these calls have been bought to open in recent weeks, suggesting traders are eyeing a move north of $220 by this Friday's close -- when the options expire.

Considering TSLA hasn't explored the north side of $220 since late August, it's possible that some of this activity is a result of short sellers hedging their bearish bets against any upside risk. Regardless, the most any call buyers stands to lose -- should their options expire out of the money -- is the initial premium paid.

Technically, TSLA stock has been notching a series of lower highs since topping out at an annual high of $269.34 in early April -- down nearly 28%, and most recently pressured by a scathing outlook from Goldman Sachs. However, Tesla Motors Inc (NASDAQ:TSLA) appears to have found a solid layer of support near $194 -- which sits just above its negative 20% year-to-date breakeven mark.

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Streaming media giant Netflix, Inc. (NASDAQ:NFLX) is due to report its third-quarter earnings after the close this evening. Ahead of tonight's quarterly earnings report, NFLX stock is 2.5% lower at $98.89. And although recent history suggests the stock could be poised to extend these losses in tomorrow's post-earnings trading, options traders have taken the glass-half-full approach to NFLX of late.

Over the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have purchased 369,320 NFLX calls, compared to 252,685 puts. The resulting call/put volume ratio of 1.46 ranks just 5 percentage points from an annual high, indicating calls have been bought to open over puts at a faster-than-usual clip.

Drilling down on more recent activity, call buyers have still dominated the stock's options pits. For instance, NFLX's October 110 call saw the largest rise in open interest over the last two weeks -- with 8,814 contracts added -- and data from the major exchanges confirms the bulk of the action was of the buy-to-open variety.

However, the company’s recent post-earnings history is far from encouraging. NFLX stock has made a move to the downside in the session following earnings in each of the last four quarters. And the shares have tended to make some volatile moves, too. The average single-day swing -- regardless of direction -- in the session subsequent to earnings over the past two years comes in at 13.4%. As of now, the options market is pricing in an even wider 16.5% move for Tuesday's trading.

From a technical standpoint, this year has been something of a mixed bag for Netflix, Inc. (NASDAQ:NFLX). The shares are off 13.5% in 2016, and have yet to close their late April earnings-induced bear gap. And while the stock has outperformed the broader S&P 500 Index (SPX) by more than 20 percentage points over the last three months, today's slip has NFLX below the historically significant $100 level. Plus, the stock is testing its 30-day moving average -- a trendline that has served mostly as support since a late-July earnings-related plunge.

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