Here’s What Insiders Are Saying About MRK

Thursday Recap: 
Merck held sway on the market
on Thursday, particularly with the Dow.  The announcement was a complete
surprise to the market.  This in itself is a surprise, because most
announcements send a pre-announcement tell to the options market makers in
Chicago, be it unusual order imbalances or sudden unexplained put/call activity
from a single house.  However, Merck options market makers on the CBOE floor
told me there was no tell or front running this announcement that they could
see.  I had lunch with a Merck options market maker Thursday and then was on the
floor in the Merck pit later in the afternoon.  For the most part, the insiders
were saying that if the Merck holds its dividend, Merck is a buy at this level. 
Early in the day the cross-over Merck options trade was indicating that the
dividend might be pulled or altered.  However, later in the day the cross-over
got back in line, indicating that options traders were optimistic that Merck
would retain the dividend.  From a technical standpoint, we had to go all the
way back to 1996 to find support near 33.  Ultimately I think that this support
will hold and Merck we will trade higher.  This activity will likely propel the
Dow higher as well.