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TFC Commodity Trading Forum

Wall Street's Friday Lunch Options

Chris Tyler, Optionetics.com
February 11, 2011

Following a confident “Cisco Who?” swagger, bulls are staging a resignation of sorts as a more important one remains missing in action. As of 10:20 ET the SP-500 (SPY) is mostly flat but off -0.05% as bulls try and hold the line on another week of extending the bull into the long in-the-tooth variety.

Cisco (CSCO) shares remain under modest pressure this morning following its well-heeded -14% fallout tied to its unnerving below-views guidance. As much, while the broader market shook off the report in favor of defending a very persistent uptrend; the networking giant’s message could be working its way into the hides of a tenacious or maybe tough as leather bull. Intraday, shares of CSCO are off -.30%.

Bulls are also resigning themselves this Friday morning (well, kind of) that not every day will show a plus sign in front of their favorite market tickers. A disappointing failure of Egyptian (still) President Mubarak to offer his immediate resignation before a record throng of protesters is also assisting bulls to at least temporarily drag their hoofs in negative territory.

Separately, from around the globe and also dampening the mood for bulls, a Brussels summit of Eurozone officials revealed Debt PIIGS constituent Portugal isn’t out of the woods just like. Like peers Greece and Ireland, the country may still require its own bailout.

In those often intertwined markets of influence, shares of the 20-Year (TLT) are up 1.30% and poking some steam out of yields as a bearish trend continues to challenge a possible triple bottom of about 20 months in length.

COMEX Gold (GLD) is up about 0.30% and confronting bears as well as the metal looks to become a bit more precious than of late. Technically, shares are confined to a third session of inside trade below 50SMA resistance, prior uptrend support from late October now acting as a thorn for bulls and a bearish triple top.

And shares of the US Oil Fund (USO) are off -0.40%. Price action remains mostly contained to the inside variety for a third session but continues to look more suspect than not within its uptrend channel of the past five-plus months.

On the corporate front, share of Naz’ 100 constituent Expedia (EXPE) have booked a long flight south with the stock off -17% intraday following mixed results and a handful of unappreciative downgrades to “Hold” by Deutsche and ThinkEquity and “Neutral” at BofA.

The online travel giant’s stock missed profit views by four cents on earnings of $0.32 per share, but showing slightly better-than-expected sales of 15.9%. A sympathetic skid of -1.00% can be found in peer Priceline (PCLN).

Shares of the more well-loved travel operator, well amongst growth stock enthusiasts at least, remain near their breakout pivot within a base-on-base pattern triggered earlier this week. Priceline reports after the closing bell on February 23.

In those sometimes accurate heat-seeking option markets, bulls and bears are buckling up for a potentially bumpy ride in Priceline. Early action Friday is on pace to narrowly best its daily average of 11,000 with nearly 7,000 mostly evenly-traded contracts having changed hands.

That same action, outside of the front month at-the-money weeklies which expire today aren’t really flashing any real spots of concentrated interest worthy of writing home about. The March contract which will be the earnings cycle front month is actually ultra quiet on the day with barely any interest. Implieds however remain well-bid and likely to build over the course of the next week as shares of PCLN confirm its own destination of sorts and one bound to be enjoyed by at least one group of passengers now on board.

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