Greece is the Word 06-20-2011

Cusick's Corner
The market held into the After Hours and now overnight and into the early morning, all eyes will be on the Vote in Greece. The wild card here is if the Greeks do not vote confidence in the government and hold up the austerity, then default is a hotter button issue again for the EU. So once this matter is in the market, we will start to focus on our Fed meeting and the fate of future QE. Again I am concerned about the lag effect in Tech, QQQ, and lack of any upside follow through in Finance, XLF, and will see if we can get through some tough upside resistance, 1280 on the S&P cash. Lastly, watch the Existing Home sales data, this kicks off the week as far as data is concerned and if the sales come in weaker than expected, the sentiment in this market could get ugly. I will be talking about these topics and more in my new online segment tonight at 9pm ET called "You Don't Know Jack: Weekly Quick Take Trading Tips." Register by using this link https://oxps.webex.com/oxps/onstage/g.php?t=a&d=497261612and see you tonight!

Stocks closed broadly higher on a relatively slow news day. With no earnings of broad market significance and no economic data to guide the action, stock market averages drifted higher at the open and trading has been relatively uneventful from that point forward. The euro was steady against the dollar after European finance ministers set a two-week deadline for Greece to implement stricter austerity measures to get more loans. Pfizer (PFE) was helping the Dow Jones Industrial Average after the FDA approved a pain drug and Walmart (WMT) was also among the Dow's winners after the retailer won a discrimination lawsuit. August Crude oil has battled back from early weakness and closed up .09 cents to $93.72. Gold is now trading down -$1.40 to $1540.60 an ounce.

Bullish
GM added 53 cents to close $29.52. Earlier today an investor sold 15,000 Jul 31 calls on the automaker at 31 cents each. The trade was tied to 280K shares at $29.50. August 30 calls saw interest as well with 10,660 contracts traded, mostly smaller lots traded at the asking price. Overall sentiment seemed to be leaning on the bullish side. Shares are up 4.5 percent from the 52-week low of $28.17 set Thursday, but down 7.5 percent month-to-date.

One of the top equity options trades today was a 20,000-contract block of Jul 5 calls on Eastman Kodak (EK). It was bought at 8 cents per contract. The same investor also sold 10,000 July 3.5 calls at 40 cents each. They collected 24 cents for the 1X2 backspread and might be rolling a position up in strikes. The spread traded more than once today and volume in the Jul 5s is now 26,500 while open interest is 23,105.

Bearish
Skyworks Solutions (SWKS) closed at $21.70 which is down -$1.46. Implied volatility was up after Deutsche Bank cut the stock to Hold from Buy. 28,000 puts and 8,200 calls traded on the Woburn, MA chipmaker. Much of the volume was in August in-the-money and out-of-the-money puts, with some players likely exiting positions after a four-month 40.7 percent slide in the share price. August 25 puts, which are 12.8 percent ITM, were the most actives and 4,600 traded (71 percent Bid) against 3,976 in open interest. Still, some investors were likely taking new positions in reaction to the downgrade and implied volatility in SWKS is up 10 percent to 54.

Index Trading
Nothing Notable this After Hours

ETF Action
SPDR Financials (XLF) lost 1 cent to close $14.88 after Citi analysts cut price targets on GS, MS, and BAC, while lowering EPS estimates on JPM. Meanwhile, in options trading, a 29000-contract block of XLF Jul 14 puts traded at 14 cents on ISE, where sentiment data indicated a customer bought-to-open and in total 44,570 contracts traded. Jul 15 puts and calls on the financial ETF were busy as well. One player bought the straddle at 76 cents, 10000X. The position was tied to 50K shares at $14.90 and it looks like it traded more than once.