Consumer Confidence Fails To Dampen Bulls Spirits
This
morning’s consumer confidence numbers reflected a much stronger-than-expected snap-back after five consecutive months of sharp declines. The
reading of 117 vs. 109 in February suggested the resilient investor that
helped drive Nasdaq, Dow and S&Ps to record levels isn’t as dead as
many had surmised. Initially, this revelation was a negative for the
markets, as good news for the economy may not be good for Wall Street hopes
of another sizable cut in interest rates by the Fed. However, after that
brief bout of selling, the bulls jumped back into the driver’s seat and
haven’t relinquished their intense grip since those shaky hands got
control late last Thursday. We’ve seen a 700-point rally since the lows of
last Thursday.
Our own measure of consumer confidence is showing similar increases in
investor sentiment, as the VIX has fallen from last Thursday’s 42% reading
fellow www.tradingmarkets.com
commentator Dave Landry cited last week. Today’s reading for the VIX is a
mere 31.4, reflecting a drop of 25%. That tells us that option investors,
retail and institutional alike, have been selling pumped-up option premiums,
rather than the scrambling to buy anything, as they were at this same time
last week. Likewise, our readings for the QQQ volatility have fallen from
readings in the 80s last Wednesday, to just 65% today. Both are clear
barometers of a clearing of the storm clouds. However, the question remains,
is this an all-clear, or are we in the eye of the storm?
Two
stocks that are seeing more than their share of bullish action are Cisco
Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating) and Worldcom
(
WCOM |
Quote |
Chart |
News |
PowerRating). Cisco has seen nearly 3:1 dollar-weighted money flowing back into its calls, while WCOM has enjoyed over 6:1
bullish moneyflow.
| Symbol | Call
Volume |
Put
Volume |
$W
Call Vol |
$W
Put Vol |
| CSCO | 74,954 | 34,442 | 145,424 | 47,551 |
| WCOM | 14,345 | 1,951 | 21,495 | 3,264 |
(1010WallStreet.com
has licensed the use of Hamzei Analytics proprietary options analytics)