The ADP Employment Change report for September was up 162,000 which was better than the consensus estimate of 133,000. The Mortgage Bankers Association reported a 16.6% increase in mortgage applications for the week of September 29, led by a 19.6% surge in refinancing applications (purchase applications rose 3.9%). The index for refinancing is at its highest level since April 2009.
For the third day in a row, options market makers added positive net deltas on their S&P 500 positions. In ON Semiconductor (ONNN), there was a buyer of 6,000 Jan 7.5 calls. This was 9x normal activity. In Brookdale Senior Living (BKD), there was a buyer of 2,000 Nov 25 calls. Options flow continues to be bullish in Delta Air Lines (DAL). Yesterday, there was a buyer of 5,000 Oct 10 Calls. In Meritor (MTOR), 3400 Nov 4 calls were bought. In New Gold (NGD), there was a buyer of 5500 Oct 11 Calls. Both the MTOR and NGD calls are in-the-money which normally is an expression of high conviction. On the bearish side, there was a buyer of 10,000 Aeropostale (ARO) Oct 13 puts, opening. Options market makers are positioning for further downside in ARO.