After a 2% October pull-back, we have already had greater than 1% recovery in November. Non-farm payrolls increased by 171,000 versus consensus expectations of 125,000. August and September were revised higher – 142,000 to 192,000 in August and 114,000 to 148,000 in September. Private sector jobs increased by 184,000. The unemployment rate was 7.9% on a larger labor force.
Yesterday, there was aggressive put buying in Cognizant Technology (CTSH) with a sweep buyer paying 40 cents and then 45 cents for a total of nearly 4,000 Nov 60 puts to open. Options traders have been active in the health care space in front of the election. In HCA Holdings (HCA), there was a buyer of the Nov 25.5 – 29.5 put spread for $0.94, roughly 14,000x. This is a bearish bet for the next two weeks. There was bullish flow in Tennet Healthcare (THC) with 7,000 calls versus 60 puts traded yesterday. 98% of the calls were in the Nov expiration with the majority being in the 25 strike. Nov 23, 24 and 26 calls were also active. Earnings are expected on Nov 7. There was also bullish flow in Community Health (CYH) with Nov 31 calls see most of the flow. 2800 calls traded bynoon versus 73 puts which lifted the 30-day implied volatility up 43%. The stock is hooking up from the bottom of the channel which is a positive technical picture.