Welcome to the TFC Commodity Trading Forum.
Please feel welcome to join in on these informative ongoing discussions about trading futures and commodities.

The Trading Forum is intended for the open discussion of commodities trading. The management of this Forum does not agree or disagree with the ideas exchanged, and does not exert editorial control over the message posted herein. Read and post at your own risk. The risk of loss in trading or commodities can be substantial. We discourage the use of this Forum to promote trading that is acknowledged to be risky. Please note: many links from the Forum lead to pages on other web sites. We cannot take responsibility for nor endorse the information presented on those sites.

TFC Commodity Trading Forum

Wall Street's Wednesday Lunch Options

Chris Tyler, Optionetics.com
February 9, 2011

All is nearly quiet Wednesday sans prepared BernankeSpeak and despite a magical ride for Disney bulls. As of 11:10 ET the SP-500 (SPY) is off -0.10% and still looking for converts for its long in-the-tooth and uncorrected 21-week rally.

On the economic front, prepared testimony in front of the House Budget Committee from Fed Chief Bernanke has been one Wednesday’s top stories and one unworthy of swaying bulls or bears.

Investors have been largely unsurprised to hear recent declines in unemployment, while encouraging, don’t suggest a new, new normal. Officials still expect it will take several years to get the labor market back to old, normal working conditions.

In other theme rides of notice and actually worthy of “mooo-ving” investors, shares of Walt Disney (DIS) continue to put together a magical performance on the heels of last night’s all-around strong report.

The entertainment goliath announced a $0.12 profit beat on stronger-than-expected sales growth of 10.0% on revenues of $10.72B compared to estimates of $10.52B. Once again, as is the case with Disney, bulls are willing to go along for the ride without enjoying any hard, quantitative guidance.

Intraday, DIS stock is currently at session highs, up 7.00%. Technically speaking, today’s price action has shares hitting its all-time-highs from another party of sorts back in 2000 in a pattern known to some as a double top until proven otherwise.

Dow constituent Coca Cola (KO) was nearly “it” with bulls but out-the-gate, but gains in excess of 3% have lost some of their fizz intraday. Shares are currently up a less bubbly 1.50%. The beverage and chip giant matched profit views on earnings of $0.72 per share and year-over-year increase of 9.0% on stronger-than-expected sales growth of 39.7%.

Elsewhere and giving a few bulls more "chills than thrills" or more "drop than pop", shares of Sigma Aldrich (SIAL) are off -6.00%. The specialty chemicals outfit and Naz’ 100 component has confirmed a bearish H&S top which saw its right shoulder develop nicely against 50SMA resistance after the company issued weak bracketing FY11 EPS guidance of $3.45 - $3.60 vs. Street estimates of $3.59 per share.

In those often intertwined markets of influence, varied but very similar negligible intraday noise in the likes of COMEX Gold (GLD), the 20-Year (TLT) and US Dollar (UUP) are providing little incentive for equity participants.

For its part, the US Oil Fund (USO) is also off fractionally by -0.25% with its price action contained by an inside candle after a rather steep multiday pullback within a now slightly more suspect uptrend. Possibly keeping bulls and bears in a technical tug-o-war, today’s weekly inventories report saw a surprise (we mean that) on-the-money build of 1.9M barrels vs. 2.0M.

Finally and in those sometimes accurate heat-seeking option markets, can we pose the question, “Just Don’t Short Us?” As traders know, sometimes trends will continue to go beyond what we think is possible. The market’s own tenacious run of the past 23 weeks thereabouts is one strong example.

Another is fiber optics outfit JDS Uniphase (JDSU) which appears to be taking a step after a rather big leap towards a second and long dormant rendezvous with momentum. Option bulls appear to be willing accomplices and supportive of further gains as heavy, bid but not over-the-top volume of nearly 50,000 is concentrated in calls across-the-board by a 4-to-1 margin.

Chris Tyler
Senior Options Writer, former Market Maker & fulltime Option Hedge Hog Advocate
Optionetics.com ~ Your Options Education Site