Consolidation day after yesterdays down trending organized sell, we call these Z Days. It's something I learned reading about Linda Bradford Raschke. These days typically follow trend days, the morning is characterized by a back and forth action trading the range.
Earnings from select companies are also weighing on the markets. It's been a mixed bag so far. FFIV got punished for lowering 2011 guidance, Mother Morgan (MS) got rewarded for getting back to basics. Google Inc. (GOOG) reported good earnings after the the bell, but the /NQ futures didn't seem to react.
Metals got the hammer closing lower in my favorites Gold (/GC) and Silver (/SI). Nymex Crude (/CL) also closed down for the day. Materials have had quite a run, especially Silver. A correction is needed and good economic news with strengthen the USD, and thus commodities fall.
We will see if demand for 2011 will increase or if speculation is the play of the year. Make a note that Silver (/SI) makes for a great mean reversion trade, the 200 day is pretty far down, we were unable to hold the 50 day.
Here is a Russell 2000 Futures (/TF) 30 min chart going back to 1/5/2010. You should notice we are right at support, the GREEN line. There is also some volume profile and the Guppy RIbbon, if you were curious. It took 7 days to go up the stairs, 2 days to come down the fire escape.
I've attached some information on options flow and other notable stock action for the day.
Advancing Sectors: Utilities (+0.6%), Financials (+0.5%), Consumer Staples (+0.4%), Consumer Discretionary (+0.2%), Health Care (+0.2%)
Declining Sectors: Telecom (-0.2%), Industrials (-0.4%), Tech (-0.7%), Energy (-0.7%), Materials (-1.5%)
Options activity is picking up in EMC ahead of the storage device maker's earnings release. Shares finished the day down 40 cents to $23.84 and options volume included 20,000 calls and 12,000 puts. Most of the action was in the February options and was mostly in smaller sizes. The top trade was a lot of 400 February 22 puts traded on the 23-cent bid. However, February 25 calls were the most actives. 9,200 traded and 70 percent of the volume was at the ask. Another 4,675 February 24 calls changed hands (79 percent Ask). The overall flow seemed somewhat bullish, as some investors might be buying calls and looking for the stock rally around earnings, due the morning of January 25.
Bullish trading was also seen in William's Companies (WMB), National Bank of Greece (NBG), and New York Times (NYT).
A number of solar names saw increasing interest in deep out-of-the-money puts Thursday. Yingli Energy (YGE) was mentioned in the midday report. Meanwhile, JA Solar (JASO) added 11 cents to $7.51 and options volume included 9,780 puts and 1,420 call options. June 4 puts were the most actives. 6,030 traded, including a block of 1,250 at 20 cents per contract. It looks like a buyer initiating a new position, even as these calls are $3.50 (or 46.7 percent) out-of-the-money. A shareholder looking for some "disaster insurance" might have initiated this somewhat unusual trade.
Bearish flow also surfaced in Yingli Energy (YGE), and RenaSolar (SOL) and Riverbed Technology (RVBD).