Weekend Market Update

Stocks Retrace From Record Highs After Jobs Report

Notable List Of Equities/ETFs I’m Tracking With Unusual Options Activity

1. Applied Materials (AMAT)- Massive open interest in the Apr 17 (monthly expiration) $23-$27 calls due to call purchases and bull call spreads in recent months. A buyer of 13,300 Apr 17 $25 calls for $0.75 each on February 3rd sent open interest above the 100,000 mark.
2. Air Products & Chemicals (APD)- A rollout from 2,460 June $145 calls ($13.70 credit) into 2,460 Sep $155 calls ($9.50 debit) on February 25th. Trader took profits on the June calls, but still sees upside north of $165 by September options expiration.
3. Boardwalk Pipeline Partners (BWP)- A rollout from 125,000 Mar $17 calls ($0.65 credit) into 45,000 Sep $18 calls ($1.70 debit) on February 19th and a rollout from 15,000 Jan 2015 $16 calls ($0.75 credit) into 15,000 June $16 calls ($1.80 debit) on December 1st, 2014. Both traders see a high $10’s/low $20’s stock price later this year.
4. Diamond Offshore Drilling (DO)- A rollout from 6,200 Mar $30 puts ($1.30 credit) into 6,200 Apr $25/$30 bear put spreads ($1.78 debit) on March 4th. The trader wants to extend his/her bearish position by an additional months; sees potential downside risk to $25 by April options expiration (breakeven of $28.22).
5. Freeport-McMoRan (FCX)- Jan 2016 $20 put open interest rose to 26,172 from 9,775 contracts during March 3rd-6th (started paying $2.79 during this streak).
6. Kulicke and Soffa Industries (KLIC)- Someone sold their 620 Apr $13 calls ($3.40 credit) and purchased 620 Apr $15 calls for $1.60 each. The Apr $16 calls also had some buyers in late January/early February for $0.75 each. Total call open interest is about 3.5x the size of total put open interest.
7. Macerich (MAC)- Large Mar $90 call buying on several days in February (open interest 16K+). On March 6th, someone bought the Apr $95/$105 bull call spread 1,700 times for a $1.75 debit. The trader sees upside to $105 by April options expiration (Macerich is a M&A target).
8. Marvell Technology Group (MRVL)- Apr 17 $17 call open interest increased by 10,000+ contracts from buying on March 4th and 5th for $0.30-$0.42 each (stood at 15,405 contracts on March 6th).
9. Nike (NKE)- Nearly 5,000 Mar 13 weekly $98 calls were purchased for $0.83 each on March 4th. Nike doesn’t report earnings until March 19th, but February retails sales and earnings from Hibbett Sports (HIBB) are due out prior to Mar 13 weekly options expiration.
10. Olin (OLN)- On February 9th, 12,000+ May $30 calls were bought for $0.45-$0.60 each. On average, just 644 calls trade per day. Despite having more than a triple in paper gains, he/she remains content with holding the position.
11. PMC-Sierra (PMCS)- On February 12th, there was a roll from 10,000 Feb $7 calls ($2.15 credit) and Feb $8 calls ($1.15-$1.20 credit) into 24,000 Jan 2016 $10 calls ($0.90-$1.00 debit). He/she took some profits near February options expiration, but continues to see this year beyond $11.
12. Qorvo (QRVO)- The May $70/$80 bull call spread was put on 7,000 times for a $2.15 debit on February 20th. On March 3rd, 2,000 May $80 calls were purchased for $1.90 each (took open interest up to 9,214 from 7,229 contracts the next day).
13. Regions Financial (RF)- 30,000+ Mar $10 calls and 11,000+ Apr $10 calls remain in open interest. Both have had buyers step up in size starting in late February, possibly on the increased chance of a Fed Funds rate hike.
14. RSP Permian (RSPP)- The June $25/$30/$35 bull call spread risk reversal was put on 2,000 times for a $0.30 credit on March 5th. Q4 earnings are due out on March 17th.
15. Salix Pharmaceuticals (SLXP)- Since February 23rd, open interest rose from 2,868 in the Apr $160 calls to 59,574 contracts as of March 6th. A move above $160 would be above Valeant Pharmaceutical’s offer of $10B for the company.
16. Westlake Chemical (WLK)- Big buying on February 19th, February 23rd, and March 5th took open interest in the Mar $70 calls from 17 to 9,493 contracts (started paying $1.10 each). This activity accounts for nearly half of all call open interest in Westlake Chemical.

New Options Trades

1. AbbVie (ABBV)- A rollout from 3,000 Aug $60 calls ($2.00 credit) into 3,000 Aug $57.50 calls ($3.00 debit) on March 6th. Volume was above the open interest in the Aug $57.50 calls. There was also sizable buying in the Apr 17 $55 puts and $60 calls (volume was above the OI in the $60 calls).
2. ACHILLION PHARMACEUTICALS (ACHN)- The Sep/Jan 2016 $15 call calendar was put on 7,500 times for a $1.20 debit. Volume was above the open interest in both options. He/she sees the stock approaching the $15 level by the fall, but not exceeding that price until after September options expiration (lowers the cost of the trade by selling Sep $15 calls).
3. Athersys (ATHX)- 2,549 July $3 calls were bought for $1.30 each, against open interest of 5,287 contracts. 4,000+ were also bought for $1.05-$1.30 each on March 2nd. Athersys reports Q4 earnings on March 12th and has Phase 2 data out in April.
4. Bank of New York Mellon (BK)- More than 11,000 Mar 20 $40 calls traded on Friday with the majority being bought for $0.37 each, against open interest of 4,068 contracts. On February 24th, there heavy activity in these calls and the Mar 13 weekly $40 calls.
5. Burlington Stores (BURL)- 2,500 Mar $55 calls were purchased for $3.20 each, against open interest of 183 contracts. There remains 14,000+ in the Mar $50 calls from buying in the previous few months (sitting on a profit). Q4 earnings are due out on March 18th.
6. Enterprise Products Partners (EPD)- In the final minutes of trading someone sold 1,750 June $32.50 puts for $1.95 and purchased 2,500 June $37.50 calls for $1.35. Volume was above the open interest in the June $37.50 calls, but 1,880 in the June $32.50 puts (check open interest on Monday for confirmation of new activity). Overall options activity was more than double the average daily volume.
7. Epizyme (EPZM)- The Mar $17.50/$22.50 bear put spread was put on 5,000 times for a $1.60 debit. Prior to this trade total option open interest was 547 contracts. Q4 earnings are due out on March 12th and the stock has 23.59% short interest.
8. Owens Corning (OC)- 2,000 May $41 calls were bought for $1.50-$1.60 on March 5th and then a buyer of 2,000+ came in on March 6th for $1.61-$1.75 each. Less than 1,000 calls trade on average per day.
9. Rosetta Resources (ROSE)- A rollout from 5,000 Mar $22.50 puts ($4.40 credit) into 10,000 Mar $17.50 puts ($0.85 debit). The trader is taking profits on the Mar $22.50 puts (initially purchased for $1.80-$2.25 each), but still sees more downside to come in the near-term.
10. WisdomTree Investments (WETF)- 13,000+ Apr $19 puts were purchased for $0.55-$0.75 each, against open interest of 70 contracts. Prior to this action total put open interest was just 11,504 contracts.
11. WPX Energy (WPX)- Nearly 4,500 Apr $10 calls were bought for $1.46-$1.70 each. Call activity was 9x the average daily volume. This action will by far create the largest OI of any WPX Energy option.
12. Zogenix (ZGNX)- The Oct $2/$4 bull call spread was put on 20,000 times for a $0.40-$0.45 debit. On average, only 1,098 calls trade per day.

Market Analysis

Notes: From December to January, Brazil’s unemployment rate spiked to 5.3% from 4.3%. This coupled with an economy that posted two straight negative GDP prints (partially due to weaker commodity prices) means a longer-term bullish setup in the (EWZ) just isn’t in the cards yet. In fact the long-term bet has been to short failed rallies to the 50-day exponential moving average (look for that later this month).

iShares MSCI Brazil Capped Index Fund ETF (EWZ) Options Trade Idea

Buy the (EWZ) Mar 20 $32 call for $0.90 or better

Stop loss- None

1st upside target- $1.80

2nd upside target- $2.70

Notes: Read more about what to expect in PNC Financial Services Group (PNC) now and how to trade it by clicking here.

Weekly S&P Sectors ETF Performance: Financials (XLF) -0.49%, Consumer Discretionary (XLY) -0.74%, Healthcare (XLV) -1.15%, Technology (XLK) -1.62%, Industrials (XLI) -1.79%, Materials (XLB) -2.00%, Consumer Staples (XLP) -2.50%, Energy (XLE) -2.83%, Utilities (XLU) -4.07%

Various Asset Classes: Spot Volatility Index (VIX) +13.94%, Natural Gas (UNG) +4.59%, U.S. Dollar (UUP) +2.38%, Oil (USO) +0.77%, Nasdaq-100 (NDX) -0.93%, Dow Jones Industrial Average (DJIA) -1.52%, S&P 500 (SPX) -1.58%, Agriculture  (DBA) -2.08%, Gold (GLD) -3.70%, , Silver (SLV) -4.28%, Bonds (TLT) -4.47%

Economic Data (3/9-3/13)

Monday: No economic data

Tuesday: 10:00 A.M. EST- Jan Wholesale Inventories (-0.1%), Jan JOLTS-Job Openings

Wednesday: 7:00 A.M.- Weekly MBA Mortgage Index; 10:30 A.M.- Weekly Crude Oil Inventories; 2:00 P.M.- Feb Treasury Budget

Thursday: 8:30 A.M.- Initial Weekly Jobless Claims (306K), Continuing Claims (2421K), Feb Retail Sales (+0.4%), Feb Retail Sales ex/Auto (+0.6%), Feb Export Prices ex/Agriculture, Feb Import Prices ex/Oil; 10:00 A.M.- Jan Business Inventories (+0.1%); 10:30 A.M.- Weekly Natural Gas Inventories

Friday: 8:30 A.M.- Feb PPI, Feb Core PPI; 10:00 A.M.- Mar University of Michigan Sentiment Survey

Earnings Reports (3/9-3/13)

Monday: Before the bell- (WUBA), (BITA), (IOC), (LITB), (POZN), (MOBI); After the bell- (VNET), (AMCN), (ALXA), (BIOC), (CASY), (BRSS), (GLPW), (IDT), (KANG), (IMUC), (KFY), (LDR), (LMNR), (MM), (MR), (NC), (APTS), (PRMW), (QIHU), (RM), (SCM), (UNFI), (URBN), (PRTS), (WPRT), (XOXO)

Tuesday: Before the bell- (BKS), (EGT), (JW.A), (LINC), (LMIA), (FISH), (MVIS), (NNBR), (OCUL), (RDUS), (SCAI), (SUP), (TCPC); After the bell- (ALOG), (HTHT), (CVGI), (CNXR), (EOX), (FAC), (FCEL), (GCA), (HRZN), (KOPN), (NCS), (NWPX), (ONTY), (SALM), (SINA), (SUPN), (SURG), (TXMD), (TCRD), (PAY), (ZGNX)

Wednesday: Before the bell- (AXTA), (FLY), (BLT), (BWS), (ESLT), (EXPR), (FGP), (FSYS), (GNE), (MRD), (PPRO), (VRA), (WRES); After the bell- (AMOT), (PARR), (CHMI), (CNAT), (PLOW), (HMIN), (IPAR), (KKD), (MW), (NEFF), (NMRX), (PLPM), (RST), (SCLN), (BOX), (TAHO), (WSM), (XOMA), (XNET), (ZOES)

Thursday: Before the bell- (BONT), (PLCE), (CLRO), (MYCC), (CSTM), (DSCI), (DG), (GCO), (GLP), (HCAP), (HOV), (JASO), (JRN), (KIRK), (LCUT), (MAG), (MPG), (MILL), (NEON), (SKIS), (PWE), (PGEM), (QIWI), (RICE), (LEAF), (SMRT), (SNTA), (MTN); After the bell- (ARO), (ATHX), (IMOS), (CVEO), (CRMD), (CTIC), (CTP), (BAGR), (LOCO), (EMAN), (EGAS), (FF), (FTD), (GAIA), (GST), (HIL), (INVE), (IRG), (INGN), (IRET), (JGW), (KIN), (KMG), (KTOS), (KRO), (MED), (PPHM), (RMAX), (TEAR), (ULTA), (EGY), (ZUMZ)

Friday: Before the bell- (ANN), (CTRN), (EBIX), (HIBB), (MEA), (MHGC), (SPPI), (STON), (UTSI)

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