A Handful Of Patience Is Worth A Bushel Of BrainsÂÂ
Today’s
sustained rally has been impressive, not just by how much the DJIA and Naz have
moved (DJIA +98, Naz + 48, as of 12:30 pm CT), but by how quietly the bulls have
pushed their case. Below we’ve listed three examples hot off www.1010WallStreet.com
scans that show pretty serious bullish money flow.
However, keep in mind that you can never blindly follow any indicator and Johnson
& Johnson
(
JNJ |
Quote |
Chart |
News |
PowerRating) is a prime example in today’s data. JNJ
shows an astonishing 462:1 dollar-weighted call-to-put volume. On closer
examination, you will find the reason for such a tremendous disparity is JNJ’s
$.36 dividend. In other words, the calls are so active because institutions and
market makers are buying the May 75, 80, 85, 90 and 95 calls and will exercise
those calls, turning them into stock tonight and thus, eligible for that $.36
dividend. Those pros are hoping the open interest (those that already own the
calls) will fail to exercise themselves into a similar long stock position and
will consequently miss their opportunity to collect that dividend.
JNJ Call Volume & Open
Interest
|
|
Bid
|
Ask
|
Vol
|
Open Int
|
| May-60
|
39.8
|
40.3
|
0
|
0
|
| May-65
|
34.8
|
35.3
|
0
|
0
|
| May-70
|
29.8
|
30.3
|
0
|
0
|
| May-75
|
24.8
|
25.3
|
1500
|
1040
|
| May-80
|
19.8
|
20.3
|
3500
|
2860
|
| May-85
|
14.8
|
15.3
|
2000
|
1886
|
| May-90
|
10
|
10.3
|
4517
|
7513
|
| May-95
|
4.9
|
5.2
|
7161
|
9753
|
Other
notable bullish indications that are seeing positive money flow, that aren’t
boosted by such artificial stimulus, are Viacom
(
VIA |
Quote |
Chart |
News |
PowerRating) and Intel
(
INTC |
Quote |
Chart |
News |
PowerRating). Both
classes could see further upside movement as a result of the institutional
buying.
3 Bullish $ Dollar
Weighted Call Classes
| Symbol
|
Call
Volume
|
Put
Volume
|
$W
Call Vol
|
$W
Put Vol
|
| JNJ
|
39,224
|
337
|
378,191
|
818
|
| VIAB
|
12,844
|
258
|
29,219
|
1,056
|
| INTC
|
124,941
|
22,842
|
655,088
|
41,579
|
One
conservative play would be the July 30 — 35 bull call spread. Buying the July
30s for $2.40 and selling the July 35s for $.70. This way the trader will own a $5 spread
for just $1.70 and a close at $35 or higher on July expiration would yield just
under 200% return on that investment.
(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 today, Thursday, May 17 at 8:00 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.