Directionless Market Finishes Flat, Super Week of Catalysts Coming Up

Another day, another session and more of the same old, same old. The market struggled to find direction, something it has essentially been doing since earnings season kicked off in mid-October. The desks were relatively quiet with everyone focused on the week of super catalysts ahead.
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Another day, another session and more of the same old, same old. The market struggled to find direction, something it has essentially been doing since earnings season kicked off in mid-October. The desks were relatively quiet with everyone focused on the week of super catalysts ahead. Important events that will affect trading the week of November 1 include: 1) Elections on Tuesday, November 2; 2) FOMC Tuesday-Wednesday November 2-3; 3) ECB/BOE on Thursday November 4 and; 4) October monthly economic data reports throughout the week.

The Dow Jones Industrial Average ended up 4.54 points, or 0.04%, to close at 11,118. The S&P 500 fell 0.52 of a point, or 0.04%, to close at 1183, and the Nasdaq was up 0.04 of a point, or 0.00%, to finish at 2507.

The CBOE Volatility IndexI:VIX closed up $0.32, at $21.20, on total put contract volume of 160,000 as compared to 149,000 calls. The VIX has resistance at its 50-day moving average of $22.33. Active November at-the-money options have low implied volatility compared to December and January, suggesting traders are expecting low risk.

The SPDR S&P 500 ETF (SPY) - Get Report closed up $0.09, at $118.49. 1.7 million put contracts traded compared to 739,000 calls, with October (W) 118 puts as the most active series on 111,800 contracts. November put option implied volatility is at 20 and December is at 21 versus its 26-week average of 23. SPY November weekly out-of-the-money puts are more active than out of the money calls, suggesting traders hedging for downside movement.

The PowerShares QQQ Trust (QQQQ) touched a new 52-week high but finished the day down $0.12, at $52.18, on put volume of 185,000 contracts as compared to 132,000 calls. QQQQ November put option implied volatility is at 21 and December is at 23 versus its 26-week average of 26.

Back to earnings...we are heading into the back end of the season and most of the big US companies/sectors have already posted numbers. However, there are still some reports we need to watch. Media/cable will be in focus, with companies like Cablevision (CVC) , Discovery Communications (DISCA) - Get Report, DIRECTV (DTV) , Time Warner Cable (TWC) , and Time Warner (TWX) reporting. In the financials, the US insurance season rolls on, and for the techies, most people are looking forward to the October-end earnings season (which Cisco (CSCO) - Get Report kicks off on November 10). Industrials/materials are largely out of the way and for the consumer names, Kraft (KFT) will be in focus on Thursday. And finally, October same-store sales will hit the tape on Thursday, November 4.

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