Trader Talk — First Hour
Trading turned mixed in the first hour on disappointing Consumer Confidence numbers. The report showed a decline to 62 for June, from 64.4 in May and below expectations of 64. The Case Shiller Price Index released earlier was better-than-expected at -1.9 percent, but had no impact on opening trading. Instead, the underlying tone remains cautious after the steep market losses suffered Thursday and Monday. The euro is down .2 percent to 1.248 in lackluster trading following another spike in Spanish bond yields and ahead of the two-day EU summit later this week. The Dow Jones Industrial Average gave back morning gains and is down 15 points. The tech-heavy NASDAQ added 7. VIX slipped .28 to 20.10 and is holding the 20 “psyche level” amid another day of uninspired volumes in the options market. Some traders I talked to are keeping position sizes smaller and attempting to play shorter-term moves, as market action remains whippy and there is no discernible market trend. 1.25 million calls and 1.3 million puts so far.
Trader Talk – 6/26/12
Cash Shiller -1.9 percent in April vs. -2.5 percent consensus
Consumer Confidence 62.0 vs. 64.0 expected
Crude oil +.18 to $79.39. Gold -$12 to $1576.40
The Pre-ECOFIN meeting/EU summit leaks won’t start until weds and thurs – Mr. Top Step. Treasury flows overnight included central banks selling 2-year Notes — possibly to buy the new auction today. Asian flows were mixed. In Europe, action had fast money doing various sales in 5s and 10s,according to traders. US SWAPS: Spds are mostly steady at the moment, front end unwinding portion of recent narrowing as LIBOR sets steady/higher, recent sizable front end receiver absent. Mr. Top Step.
News Corp to Split in Two –Market Watch
Monsanto Puts at 5 year Highs ahead of Earnings – “Options traders are boosting the cost of bearish Monsanto Co. contracts to a five-year high before tomorrow’s earnings report, even after the world’s largest seed company increased its profit estimates.” — Bloomberg
Top 10 Equity Block Trades – Trade Alert
2.20m NOK 2.16 -0.04 -1.6% NASDAQ 10:13:10
1.00m RF 6.40 NASDAQ 10:18:53
1.00m RF 6.47 +0.07 +1.1% NASDAQ 10:02:03
800k CBE 66.30 +0.11 +0.2% NASDAQ 10:17:29 – Bunched
793k PXD 79.65 +0.87 +1.1% NASDAQ 10:06:58 – Bunched
785k PXD 79.30 +0.70 +0.9% NASDAQ 10:06:09 – Bunched
600k ETN 37.36 +0.21 +0.6% NASDAQ 10:17:15 – Bunched
498k CDR 4.60 NASDAQ 09:54:25
450k NOK 2.14 -0.05 -2.3% NASDAQ 09:54:13
440k KFT 38.30 -0.29 -0.8% MIDWEST 09:45:23 – Tied to Options
Notable Flow
Bullish flow detected in Energy XXI Limited (EXXI), with 5303 calls trading, or 6x the recent avg daily call volume in the name. Shares near $26.66 (0.2) with ATMIV lifting by 1.79 point and 100% of todays call premium trading offer side.
Bearish activity detected in Elan Corp ADR (ELN), with 14566 puts trading, or 7x the recent avg daily put volume in the name. Shares near $14.48 (0.39) with ATMIV lifting by 2.05 point and 91% of todays put premium trading offer side.
Over the first hour 110539 contracts have traded in SPX today, 0.97x the recent hourly average, with 35002 calls and 75537 puts trading as the index trades near $1314.15 (0.43). Front term atm implied vols are near 18.5% and the CBOE VIX is currently near 20.16 (-0.22). (Trade-Alert)
iShares Germany Fund (EWG) is up a penny to $18.71 and an interesting trade on the ETF this morning is an outright buyer of 5,000 July 19 calls for 50 cents per contract. EWG is testing its early-June lows after a three-day 7.8 percent slide. Today’s call buyer is possibly positioning for a rally in Germany’s equity market heading into the two-day EU summit beginning Thursday. (Whatstrading – Premium)
Category: Market Update
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About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.
Germany's Merkel says Europe will not have shared liability for debt as long as she lives – Reuters.
EWG catching a bid here, up 1.2 percent off session lows and trading at $18.92. There was a 5000-lot buyer of July 19 calls on the ETF this morning for 50 cents per contract. "Rumors from sources continue to cross wires; the latest is Conservative German lawmakers being told that EU discussing removing preferred creditor status from ESM" – Briefing.