Stocks moved lower into the bell, as industrial stocks lost ground, but managed to close flat on thin volume ahead of Q3 earnings. The Dow Jones Industrial Average ended up 2.11 points, or 0.02%, to close at 11,008. The S&P 500 fell 0.11 of a point, or 0.01%, to close at 1165, and the Nasdaq was up 0.42 of a point, or 0.02%, to finish at 2402.
Gold traded toward $1,350 an ounce during the session as the U.S. dollar continued its decline against other major currencies. Oil prices slipped slightly to trade below $83 a barrel.
The CBOE Volatility IndexI:VIX closed down $1.76, at $18.95. VIX October 24 and 35 calls were active as a near-term hedge into expiration. Overall put volume of 113,000 contracts compared to call volume of 219,000.
The SPDR S&P 500 ETF (SPY) - Get Report closed up $0.11, at $116.65, with overall put volume of 802,000 contracts traded as compared to call volume of 367,000. October option implied volatility is at 17 and November is at 20, below its four-month average of 25. October 112 and 114 puts were active on low volatility as the market continues to trend higher, suggesting the sellers of the puts are bullish.
The PowerShares QQQ Trust (QQQQ) closed up $0.02, at $49.77. Overall put volume of 148,000 contracts compared to call volume of 115,000, with October 49 puts as the most active series on 33,000 contracts. QQQQ November put option implied volatility is at 21 and December is at 23, below its three-month average of 26 indicating decreasing price risk.
Apple (AAPL) - Get Report closed up $1.29, at $295.36, on put volume of 104,000 contracts compared to 187,000 call contracts, with November 340 calls active on 6,300 contracts and low volatility. November put option implied volatility of 33 is below its 26-week average of 35, suggesting lower risk. AAPL is expected to report Q4 EPS on October 18.
Intel (INTC) - Get Report closed up $0.04, at $19.56, on put volume of 78,000 contracts compared to call volume of 105,000 contracts. November put option implied volatility is at 28 and January is at 30, near its 26-week average of 31, indicating non-directional price movement after EPS.
Traders will be particularly focused on positions this week as October options cease trading at the close on Friday. In addition, there are a slew of important economic data for the week of October 11 including: Tuesday: ICSC Goldman Store Sales at 7:45 a.m. EDT, Redbook at 8:55 a.m. EDT, FOMC Minutes (2 p.m. EDT); Wednesday: MBA Mortgage Applications at 7:00 a.m EDT, Import and Export Prices at 8:30 a.m. EDT, Treasury Budget at 2 p.m. EDT; Thursday: International Trade, Producer Price Index, Jobless Claims at 8:30 a.m. EDT, EIA Natural Gas Report at 10:30 a.m. EDT, EIA Petroleum Status Report at 11 a.m. EDT; Friday: Ben Bernanke speaks at the Boston Fed's conference on Revisiting Monetary Policy in a Low Infaltion Environment at 8:15 a.m. EDT, Consumer Price Index, Retail Sales, Empire State Manufacturing Survey at 8:30 a.m. EDT, Consumer Sentiment at 9:55 a.m. EDT and Business Inventories at 10:00 a.m. EDT.
Away from the macro and onto Q3 earnings season as we kick into high gear this week. For tech, the highlights will be Intel (INTC) - Get Report on Tuesday night and Google (GOOG) - Get Report on Thursday night. There is not a lot of anticipation for INTC, given they have warned and investors are looking for December revenue guidance. JPMorgan Chase (JPM) - Get Report is the first financial to report, although the bulk of bank EPS does not come until the week of October 18. CSX (CSX) - Get Report starts things off Tuesday and Landstar Systems (LSTR) - Get Report on Thursday for the transports. And finishing off the week is General Electric's (GE) - Get Report results Friday morning.
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