America Online Goes Off-line With Time Warner Warning

Across-the-board buying
in the blue-chip sector
has the DJIA up 209 points (as of 11:45 CST), but the
Nasdaq is not exactly following that lead. Part of the reason for that is the
action in Sun Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating)
, which continues to be plagued
by analyst downgrades.

If you have quotes, you might like to check out the action in the January 17
puts. There are extremely aggressive buyers of these, despite the fact that they are
more than $10 out-of-the-money. To say that the market is afraid that SUNW
will miss earnings and growth is an understatement indeed.

Then there’s the ugliness in American Online
(
AOL |
Quote |
Chart |
News |
PowerRating)
. Their
partner, Time Warner
(
TWX |
Quote |
Chart |
News |
PowerRating)
warned the Street, and you see the
resulting 6 1/4 point sell-off in AOL and the 9-point drop in TWX.
Volatility is higher, but not exploding, as traders have not been bullish on
this deal since it was announced.

Bearish
Put vs. Call $ Weighted Ratios:

Most negative is the SUNW and INTC. YHOO continues
to show on the list, but a significant portion of the puts trading there are
related to market maker to market maker interest rate plays.


Bullish
Call vs. Put $ Weighted Ratios:

Note the action in Veritas
and SEBL. Both show extremely large accumulations of call premiums
versus puts.

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