Crude on the Move

Cusick's Corner
Volume is way down, window dressing is done and the market rests in front of the Unemployment data tomorrow. Take the afternoon looking at sectors and stocks that you believe will grow in a sub 9% unemployment environment. Keep in mind that you will have to take into consideration and balance the risks. Fo example sectors like Industrial Products or Retail, are sectors that like good, solid employment and spending environments. See you After Hours.

Trading is relatively slow, with economic news, rallying crude oil prices and end-of-quarter position squaring driving some of the market action Thursday. Jobs data is in focus after the Labor Department reported that weekly claims fell by 6,000 to 388,000 in the week ended March 26. Economists were looking for a decline of 9,000. While the number didn't miss by much, it did hold more sway than usual because it comes ahead of monthly payroll data Friday morning. However, a separate report released later showed the Chicago PMI, a gauge of regional manufacturing activity, at 70.6 in March; which was down from 71.2 the month before, but better than the 69.5 that economists had expected. Meanwhile, crude oil gained $1.89 to $106.16 and touched its best levels since 2008. The looming jobs report and rallying crude is keeping a lid or rally attempts. But end-of-quarter window dressing might be helping to keep a floor under stock prices as well. The Dow Jones Industrial Average has added 10 points and the tech-heavy NASDAQ gained 1.5. The CBOE Volatility Index (.VIX) edged down .15 to 17.56. Overall options volume is light, with 3.7 million calls and 3.2 million puts traded through 11:30 central time.

Bullish Flow

Tesla Motors (TSLA) is up 18 percent to $28.05 after a Wall Street analyst upgraded the stock to Overweight and put a $70 price target on shares of the maker of electric vehicles. Options are seeing heavy trading as well. 22,000 calls and 7,200 puts traded in TSLA through midday, which is 10X the average daily volume for the name. April 29 calls, which are 5 percent out-of-the-money [OTM] and expire in 15 days, are the most actives. 4,500 traded. May 26, May 28and June 30 calls are busy as well.

Clean Energy Fuels (CLNE) calls are busy for a second day. Shares rallied Wednesday after T Boone Pickens told reporters that he expects the NAT GAS act to pass the House of Representatives. The act gives buyers of natural gas powered vehicles tax credits. Pickens is the founder of CLNE, which is a provider of natural gas to vehicle fleets. The stock is down 19 cents to $16.21 and 5,700 calls traded in the name through midday. The volume represents 4X the normal and about 3X the day's put volume. April 17 calls, which are 3.8 percent OTM and expire in a little more than two weeks, are the most actives. April 18, May 17 and Jan 15 calls are also seeing interest Thursday.

Bearish Flow
The biggest options trade so far today is in the iShares Japan Fund (EWJ). The exchange-traded fund, which holds shares of Toyota (TTM), Sony (SNY), and other major Japanese corporations, is off 10 cents to $10.36 and an investor pays 16 cents per contract for a block of 40,000 June 9 puts. Open interest is 110,000 contracts and so the purchase might offset (or close) an existing position. It was also tied to a block of 560,000 shares at $10.36 per share and, if this is opening, possibly a volatility play on Japan's equity markets. That is, by buying shares and puts, the strategist is positioning for a volatile move in EWJ.

Dell Computer (DELL) is trading down 18 cents to $14.46 and one or more investors shows interest in a bearish-three way spread in the computer maker. In midday trading, a 300-lot of May 16 calls traded on the 15 cent bid and the May 14 - 12 put spread traded at 39 cents, 300X. In this trade, it appears that the May 16 calls are being sold to help finance the spread. In addition, it has been repeated multiple times Thursday morning and volume in all three contracts is more than 5,000. If so, it's bearish short-term trading, as the spread offers a max pay-off if shares fall to $12 or less by the May expiration. There's also risk to the upside because the May 16 calls are not covered.


Macy's (M) options volume is running 5X the (22-day) average, with 49,000 contracts traded and call volume accounting for about 79 percent of trades.
Nabors Industries (NBR) options volume is 8X the average daily, with 46,000 contracts traded and put volume representing for 69 percent of the activity.
Mosaic (MOS) options volume is running 2X the average daily, with 45,000 contracts traded and call volume accounting for 67 percent of the activity.
Increasing options activity is also being seen in Cephalon (CEPH), Dendreon (DNDN), and CF Industries (CF).

Implied volatility Mover
Ford Motor (F) is seeing heavy trading ahead of the release of auto and truck sales numbers. The automakers are due to report their monthly results tomorrow. Shares are down 4 cents to $14.82 ahead of the news and 97,000 calls/41,000 puts traded in Ford so far. May 14 puts and January 12.5 calls are the most actives. Meanwhile, implied