MWD Downgrades Semis, But Where’s The Put Volume?

• April 16, 2001
• Jon Najarian

The biggest news of the day (unless
you were a shareholder of either First Union, or Wachovia Banks) had to be
Morgan Stanley’s
(
MWD |
Quote |
Chart |
News |
PowerRating) downgrade of Intel

(
INTC |
Quote |
Chart |
News |
PowerRating), Broadcom
(
BRCM |
Quote |
Chart |
News |
PowerRating), Lattice
Semiconductor Corp.
(
LSCC |
Quote |
Chart |
News |
PowerRating) and Xilinx

(
XLNX |
Quote |
Chart |
News |
PowerRating). These downgrades definitely put the whip to the semiconductor
sector. I guess you have to credit MWD for having better timing than Lehman
Brothers, as they signaled the recent bottom for the SOX with their downgrade
a little over a week ago, when the SOX was down around $475. Today the SOX
stood nearly 125 points higher (26%) at 597 before the MWD reduction knocked
20 points off the SOX.

Symbol color:black”>

Call VolumePut Volume$W Call Vol$W Put Vol

AMAT color:black”>

11,6867,26362,46424,956

AMD color:black”>

5,2387758,3511,632

ATML color:black”>

454101592134

INTC color:black”>

23,90320,59734,56135,400

KLAC color:black”>

6253371,953804

LLTC color:black”>

1,3601,8413,3125,254

LSCC color:black”>

265137

LSI color:black”>

1,0532012,958403

MOT color:black”>

4,9183,6178,6116,653

MU color:black”>

3,6161,74810,8475,252

MXIM color:black”>

4436023,0821,639

NSM color:black”>

5205241,453625

NVLS color:black”>

6221,5243,9706,189

RMBS color:black”>

3,45259014,7141,402

TER color:black”>

6071,1382,3881,598

TXN color:black”>

2,7381,4618,2234,501

XLNX color:black”>

1,41512,8596,00436,437The only thing somewhat surprising is that there seems to be a dearth of speculators betting on a continuation of the semiconductor selloff, but whether you look at INTC, or Applied Materials Inc. ( AMAT | Quote | Chart | News | PowerRating), or any of the other stocks in the SOX, you aren’t seeing $ weighted puts soaring. Instead, you are seeing modest put action given the downgrade. Could this mean the worst is over for the chips? Stay tuned. One of the rarest sightings on Wall Street this year has been that of a net stock pre-announcing positive earnings. That happened today, when Expedia ( EXPE | Quote | Chart | News | PowerRating) said it will post positive third-quarter earnings of 9 cents per share on revenue of $110 million. It’s their first positive cash EPS for Mr. Gates’ online travel service, but one of several pieces of good news for the sector (AMZN and YHOO). You may have missed this tidbit, but the San Francisco Federal Reserve says it estimates the average California household will pay an extra 1.5% of its income over the next year to cover costs related to higher energy prices. Now, 1.5% might not seem like much, but it’s enough to make us sit up and take notice. (1010WallStreet.com has licensed the use of Hamzei Analytics proprietary options analytics) Gary Kaltbaum on TradingMarketsWorld! Gary Kaltbaum will be appearing on the Intermediate-Term Trading board Thursday, April 19, at 8:00 p.m. ET. Be sure to take this opportunity to chat with and have your questions answered by a leading intermediate-term trader. Click here to take your trading to a new dimension.