The Calm Before The Storm?
With a decision today from the Florida
Circuit Court almost certain, and a ruling by the U.S. Supreme Court possible,
the nation awoke Monday morning in the hopes that the identity of the next
president may become, at last, somewhat clearer. While the pre-bell market
remained tepid and calm, many players felt this to be merely the calm before
today’s possible storm of volatility. As options players are by now acutely
aware, election-related news of any merit tends to crack the market like a whip.
In general, pro-Bush administration news seems to produce a substantial upside
bounce, while pro-Gore news causes a precipitous dip. Because today’s
potential judicial rulings are among the most significant to date, it follows
that the market may react accordingly.
Pre-open order
volume was moderate this morning. Overall, call sellers and buyers are even at
1:1, as are put sellers and buyers. Some of the usual tech titans lead in terms
of order volume, with the top five as follows:
(
INTC |
Quote |
Chart |
News |
PowerRating),
(
CSCO |
Quote |
Chart |
News |
PowerRating),
(
MSFT |
Quote |
Chart |
News |
PowerRating),
(
QCOM |
Quote |
Chart |
News |
PowerRating) and
(
JDSU |
Quote |
Chart |
News |
PowerRating). In pre-bell activity,
(
QCOM |
Quote |
Chart |
News |
PowerRating) put sellers
outnumber buyers 3:1. INTC put buyers outnumber put sellers 3:2. CSCO call
sellers are coming out in force, out-pacing buyers 3:2. MSFT call buyers are
showing their faces, leading sellers almost 3:1.
First hour order volume shows call
sellers and buyers even with put buyers leading sellers narrowly by 10% on
moderate volume. The volume leaders: CSCO, INTC, QCOM, and MSFT jockeyed for
position with SUNW pushing ahead of JDSU. ORCL call sellers are outpacing buyers
4:1, while put buyers dominate 6:1. IBM put buyers completely over-shadow
sellers.
Entering into a directional spread
(see my lesson)
is advisable today with caution. If volatility pops, those of you trading in and
out of verticals should be careful—