Roughly a week before its earnings report, United States Steel Corporation (NYSE:X) has seen an unusual uptick in options activity.

Specifically, X just showed up on Schaeffer's Senior Quantitative Analyst Rocky White's list of S&P 400 (SP400) members with the highest option volume over the past two weeks. During this time period, 227,870 calls and 159,019 puts were exchanged. The most popular position was the February 30 call, followed by the June 18 put. 

The company is slated to report fourth-quarter results after the close on Thursday, Feb. 2, and analysts anticipate earnings of 62 cents per share on revenue of $3.94 billion. U.S. Steel stock has a generally upbeat history of post-earnings reactions, finishing five of eight next-day sessions higher, including a 9% pop in July. This time around, markets are pricing in an 8.3% move for the shares, regardless of direction -- higher than the 6% swing averaged over the last two years.

At last check, the steel producer's shares were fractionally higher, and once again breaking above the $28 level. A small early November bull gap saw the stock bounce above its 140-day moving average, which pressured the shares since the beginning of May. In the last 12 months, X has managed to add nearly 47%.

A continued unwinding of pessimism in the options pits could provide United States Steel stock with some much-needed tailwinds. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 50-day put/call volume ratio of that stands higher than 78% of readings from the past year. This indicates that, while calls are outpacing puts on an overall basis, the latter were picked up at a faster-than-usual clip over the last 10 weeks.

Echoing this, short-term options traders have been much more put-biased. This is per X's Schaeffer's put/call open interest ratio of 1.49 that stands higher than 75% of annual readings. 

Those looking to speculate with options are in luck. The stock's Schaeffer's Volatility Index (SVI) of 52% stands in the 26th percentile of readings from the past year, indicating options traders are pricing in low volatility expectations. What's more, its  Schaeffer's Volatility Scorecard (SVS) tally sits at 98 out of 100, which points towards the equity's tendency to outperform volatility expectations. 

Elsewhere, short sellers are building their positions on X, adding 17% in the past two reporting periods. The 17.44 million shares sold short make up 7.5% of United States Steel stock's available float, or more than two days of pent-up buying power. It's also worth pointing out that all six covering analysts rate the shares a "hold" or worse, and a shift in sentiment could cause more tailwinds.

The broader market is on the rise today, and a few stocks in particular are seeing tailwinds after bull notes. 

Barclays sees potential upside for Advanced Micro Devices Inc (NASDAQ:AMD), and upgraded the stock to "overweight" from "equal weight," with a price-target hike to $85 from $70. The firm upgraded several chip stocks, claiming the U.S. semiconductor sector just had its worst correction since the tech bubble of the late 1990's. Truist Securities threw in a bull note as well, raising its price target to $79 from $70. At last glance, Advanced Micro Devices stock was up 7.7% to trade at $75.48, and is currently up 15.9% year-to-date.

Shopify Inc (NYSE:SHOP) stock is up 6% at $42.92 at last check, after Deutsche Bank upgraded the SHOP to "buy" from "hold" and hiked its price target to $50 from $40. The firm sees more than 20% upside for the stock as more brands move to the platform. The equity is fresh off its fourth-straight week of gains, and is already up 23.8% since the start of 2023. Options bulls have been targeting the stock with a fervor amid the positive price action. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SHOP's 10-day call/put volume ratio of 3.39 and its 50-day call/put volume ratio of 2.48 both rank in the 98th percentile of its annual range. 

Wayfair Inc (NYSE:W) stock is soaring to its highest level since August, up 24.3% at $58.17 at last look, after several bull notes. J.P. Morgan securities double-upgraded the shares to "overweight" from "underweight," with a price-target hike to $63 from $35, saying its time to buy the stock on the dip. Plus, Wedbush upgraded W to "outperform," and BofA Global Research hiked its rating to "buy." No fewer than four other analysts raised their price targets as well. 

Futures on the Dow Jones Industrial Average (DJIA) are up 72 points ahead of the open, while Nasdaq-100 Index (NDX) and S&P 500 Index (SPX) futures are inching higher as well. Investors are looking ahead to a busy week of earnings, with several blue-chip names set to report, after Friday marked a steep weekly loss for the Dow.

Continue reading for more on today's market, including:

• A look at what happened with the market last week.  
• Tech sector markers to watch as 2023 gets underway. 
• Plus, AMD receives bull notes; ABT drops on criminal probe; and CRWD downgraded.

5 Things You Need to Know Today

1. The Cboe Options Exchange (CBOE) saw more than 1.9 million call contracts and over 1 million put contracts traded on Friday. The single-session equity put/call ratio fell to 0.54 and the 21-day moving average dropped to 0.81.
2. Barclays sees potential upside for Advanced Micro Devices Inc (NASDAQ:AMD), upgrading the stock to "overweight" from "equal weight," with a price-target hike to $85 from $70. Truist Securities added a bull note as well, raising its price target to $79 from $70. Year-over-year, AMD is down 42.5%, and sporting a 2.9% premarket lead. 
3. Abbot Laboratories (NYSE:ABT) is down 1.7% in electronic trading, following Friday's news that its its infant-formula plant in Sturgis, Michigan is facing a criminal probe. Year-over-year, the equity is down 9.5% coming into today. 
4. CrowdStrike Holdings Inc (NYSE:CRWD) is down 1.4% before the bell, after Deutsche Bank downgraded the shares to "hold" from "buy." Should these losses hold, the stock will move back toward its Jan. 10 two-year low of $92.25. The company also appointed Johanna Flower to its board of directors.
5. Today will bring leading economic indicators.

Tech Boosts International Markets

Most markets in Asia were closed on Monday for the Lunar New Year. Japan’s Nikkei added 1.3% on gains in the tech and semiconductor sectors.

Tech stocks are also leading the charge In Europe, while investors continue to question the global economic outlook. At last check, London’s FTSE 100 is 0.4% higher, while Germany’s DAX and France’s CAC 40 are up 0.2% and 0.1%, respectively.

Western Digital Corp (NASDAQ:WDC) is advancing its merger talks with Japan's Kioxia Holdings Corp, per a report from Bloomberg News. The proposed combined entity would trade in the U.S. and become a major competitor of Samsung Electronics in the NAND flash market.

Before the bell, WDC was last seen 4% higher. Should these premarket gains hold, the shares will open at their highest level since Sept. 13. Fresh off its fourth-straight weekly win -- its longest streak in a year -- Western Digital stock now sports a 21.9% year-to-date lead. 

There's room for analysts' pessimism to unwind, too, which could boost the equity. Coming into today, eight brokerages rated WDC a "buy" or better, though nine recommended a "hold" or worse. Meanwhile, the 12-month consensus price target of $44.01 is a roughly 10% premium to the stock's premarket levels.

The Dow tacked on 330 points, but pummeled to its worst week since December in today's trading. The Nasdaq also nabbed a triple-digit gain, thanks in part to Alphabet (GOOGL) layoffs, while the S&P 500 managed to snap its three-day losing streak. Despite an encouraging subscriber report from Netflix (NFLX), the Dow and S&P 500 logged their first weekly losses in 2023. Also worth noting, the Cboe Volatility Index (VIX) saw its biggest weekly percentage gain since Dec. 9, and the Nasdaq managed to walk away a with a third-straight weekly win. 

Continue reading for more on today's market, including:

• Keep tabs on these tech sector markers.
• FDA rejection weighed on Eli Lilly stock.
• Plus, NFLX's subscriber growth; cloud stock downgraded; and looking back at this week's main happenings.

5 Things to Know Today 

1. Alphabet today joined a growing list of tech companies announcing layoffs, as the Google parent announced plans to let go of 12,000 employees in a memo. (CNBC)
2.  Bed Bath & Beyond (BBBY) has not yet filed its Form 10-Q quarterly report with the Securities and Exchange Commission (SEC), putting it at risk of Nasdaq delisting. (MarketWatch) 
3. Netflix stock surged after beating subscriber growth estimates.
4. Cowen downgraded Salesforce.com stock on risk of disruption.
5. Revisiting this week's biggest earnings reports and headlines.

Gold, Oil Prices Score Weekly Gains

Oil prices settled higher on Friday to score a back-to-back weekly gain of 1.8%. Traders continued to brush off an Energy Information Administration (EIA) report showing an 8.4 million rise in U.S. crude inventories, as they remained optimistic about demand growth out of China. March-dated crude, which is now the front-month contract, rose $1.03, or 1.3%, to settle at $81.64 per barrel on the day.

Gold prices also finished higher, and marked its fifth consecutive weekly win to boot. Boosting the yellow metal was household demand for gold ahead of the Lunar New Year holidays in China. February-dated gold added $4.30, or 0.2%, to settle at $1,928.20 per ounce. For the week, gold prices rose 0.3%.

The holiday-shortened week was not short on volatility, with the S&P 500 Index (SPX) kicking things off by breaching the psychologically-significant 4,000 level, while the Nasdaq Composite Index (IXIC) managed to extend its winning streak to seven, before snapping it on Wednesday. Sentiment quickly soured, however, despite upbeat inflation data rolling in, and the Dow Jones Industrial Average (DJI) logged its worst single-day percentage drop in over a month. Fear of the Federal Reserve overtightening continues to weigh, and as of this writing all three major indexes are on track for their first weekly loss of 2023.

The Week's Biggest Earnings Reports

With 2023 firmly underway, a new earnings season is upon us. Traders were most interested in bank earnings this week, especially the reports from Morgan Stanley (MS), Goldman Sachs (GS), and Fifth Third Bancorp (FITB). Earnings from Netflix (NFLX) were also in focus, and the results gave Wall Street a much-needed boost. At least one analyst hiked its price target on United Airlines (UAL) following an upbeat forecast, while Alcoa's (AA) bleak shipment outlook dented the company's shares. Lastly, Procter & Gamble (PG) posted a mixed quarterly report, citing that it anticipates higher prices moving forward.

In Case You Missed It

Party City (PRTY) -- a giant during the "meme stock" craze -- filed for Chapter 11 bankruptcy following months of slowing sales and store closures. The recent barrage of layoffs in the tech sector show no signs of slowing down, with Teladoc Health (TDOC) and Microsoft (MSFT) joining the bunch with a hefty round of job cuts. Elsewhere, Carvana (CVNA) adopted a "poison pill," while bear notes rolled in for Tesla (TSLA) and Rivian Automotive (RIVN) on a plethora of challenges ahead.

Inflation Data, Blue-Chip Earnings Ahead

As we head into the end of January, investors will turn their attention towards a fresh batch of inflation data, as well as several blue-chip earnings. In the meantime, check out the possible bullish implications for the SPX, in the event of a ratio rollover.

Subscribers to Chart of the Week received this commentary on Sunday, January 15.

The Nasdaq Composite (IXIC) is wrapping up its best weekly win since Nov. 11. While Friday’s broad-market breather halted the tech-heavy index’s five-day winning streak, the dominant headlines this week remained all about the Federal Reserve, inflation, and the upcoming earnings season. With the IXIC and its corresponding tech indices getting the short end of the stick from media, we want to start off 2023 with some major technical milestones to monitor.

The Nasdaq settled above 11,000 for the first time since Dec. 14 on Thursday night. Schaeffer’s Senior Market Strategist Chris Prybal has noted in the past that the Nasdaq has shown the propensity to respect 1,000-point levels. Per the chart below, you can see the index’s Covid low was at 7,000, while its post-Covid high was clocked at 16,000.

With that in mind, let’s turn to the Nasdaq-100 Index (NDX), a large-cap growth index of 100 of the top domestic and international non-financial companies based on market cap. The NDX’s 10-day buy-to-open put/call volume ratio was at a record high of 0.96 heading into the new year. Fast forward a week, and it has cooled to 0.91, per the chart below, but you can see that it remains at elevated levels in the last three years. And among index component short sellers, NDX short interest has fallen in 4.2% in the most recent report, but remains up 31.7% year-over-year, and in the 92.5% rank of the last five years. Senior Market Strategist Matthew Timpane highlighted this trend last week, Jan. 5, on Twitter. Note how he acknowledges the rebalancing effort, but considering this percentile still remains elevated a week later, it’s proven worth monitoring.

Last week we saw an increase in Short Interest in Nasdaq-100 Stocks by +13.76%

YOY Change: +35.22%

%Rank Past Year: 100th percentile
%Rank Past 5-years: 99th percentile

A lot of this increase was due to rebalancing; however, it's still a noteworthy increase. $QQQ $NDX pic.twitter.com/6fZxv8CRPA

— Matthew Timpane, CMT (@mtimpane) January 5, 2023

Breaking it down further, consider the Invesco QQQ Trust Exchange Traded Fund (ETF) (QQQ) for a moment. The NDX’s ETF is once again facing off with its 1,000-day moving average, a long-term trendline that’s been popular in this space in the last 24 months.

And if you want to dig deeper and monitor individual equities, per Senior Quantitative Analyst Rocky White, Netflix (NFLX) and Alphabet (GOOGL) are historical outperformers in January. NFLX averages a 15.7% monthly return with 70% of the returns of the positive in the last 10 years, while GOOGL’s average 10-year return comes out to 3.9%, with eight out of 10 of the returns positive. Considering the combined holdings of NFLX and GOOGL comprise 8.8% of the QQQ, keep an eye on these FAANG heavyweights while the larger tech indices dance with contentious trendlines.