Over the past hour, the major indices have basically flat-lined near the unchanged levels. This is not a bullish sign. But maybe the lack of action is tied to the statistic, provided by CNBC's Bob Pisani, which states that by midday, 30% of traders will be gone for the July 4 weekend, and by tomorrow, that number of absentees will rise to the 70% level. Where he gets those numbers, I have no idea, but it sounds right. It still doesn't fully explain the general weakness. Typically, holiday-shortened weeks have a bullish bias, as traders like to show their true blue patriotism.
But maybe the lift in oil and general malaise hanging over the market is taking precedence over patriotism.
Though it is notable that some of the other commodity-related names, especially in coal and steel, are taking a beating. Arch Coal (ACI - commentary - Cramer's Take), Peabody Energy (BTU - commentary - Cramer's Take) and U.S. Steel (X - commentary - Cramer's Take) and Schnitzer Steel (SCHN - commentary - Cramer's Take) are all down over 5% today. There is also heavy put volume in the names, and implied volatility is up some 10% in the two sectors.
Circuit City (CC - commentary - Cramer's Take) has blown a fuse and is back at toddler two's pricing after BlockBuster (BIIB - commentary - Cramer's Take) said it is no longer interested in acquiring the electronics retail chain. Options volume in Circuit City is running about five time the daily average with the July, and August 2.50 puts the most active strikes. Looks like people are betting on bankruptcy.
Steven Smith Blog Investors Showing Their Id 7/2/2008 9:36 AM EDT The fear factor is still the guiding emotion in this market.
Steven Smith Blog Bottoms Up? 7/1/2008 5:23 PM EDT That looked a lot like a double bottom on the S&P today.
Steven Smith Blog Taxes Paid, Time to Rest 7/1/2008 12:17 PM EDT H&R Block and Tempur-Pedic see some interesting action today.
Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback; click here to send him an email.To read more of Steve Smith's options ideas take a free trial to TheStreet.com Options Alerts.
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