The market is responding favorably to rumblings that fiscal cliff negotiations are going well. Technically, the market had reached a short-term oversold level (fewer than 10% of stocks were trading above their 10-day moving average) where a bounce often occurs. Volatility should be elevated while the fiscal cliff negations are underway. It’s becoming increasingly common in the past week or two to see the major indexes move by a percent or more intraday.
In Opko Health (OPK), if you called in your stock, we recommend selling it today. The stock is trading near $4.49, up $0.11 from Friday’s close.
On Friday, there was 14x the normal bullish flow in Brookdale Senior Living (BKD) with roughly 3,500 Dec and Jan 25 calls purchased. The company’s next earnings report is expected to be February 14, after the expiration of the options just purchased. In Tetra Technologies (TTI), there was a buyer of 2,300 Dec 5 puts. This was 2,500x normal volume. It is being reported today that a director and SVP bought 180,000 shares worth $1.1 million. It is possible the put buying is simply a short-term hedge. Generally, options flow on Friday was unusually light.