The advance Q3 GDP report was up 2.0% versus 1.3% in the second quarter and consensus expectation of 1.9%. Apple (AAPL) and Amazon (AMZN) reported disappointing earnings. A number of analysts have come out to defend both stocks and they are trading higher pre-market.
In options, Andersons (ANDE) is trading near lows. 31x the normal volume was traded with the action concentrated in the Dec 40 calls bought to open. Since its IPO, Groupon (GRPN) has traded down from roughly $30 to $4.46. Yesterday, there was an opening buyer of 30,000 GRPN Apr 4 in-the-money calls. In-the-money calls carry a high delta and are much like buying the equity itself. On the bearish side, there was a buyer of 5,000 Valueclick (VCLK) Jan 15 puts. This was roughly 40x normal volume. The company is confirmed to report earnings on November 1 after the close.
Stocks above the 10-day moving average is roughly 30%. There were more highs yesterday than lows. The market is not oversold in the near-term. Our market sentiment indicator has gone lower for five straight weeks and is just barely bullish. Given these metrics, we would like to be cautious and not add aggressively to our current market exposure.