The S&P 500 is working higher off of its 50-day moving average line. Technically, the market had become oversold. The number of stocks trading above their 10-day moving average had dropped to 28%. There have not been many days with this percentage below 30% since June. Options market makers turned noticeably more bullish yesterday with net deltas running back up to their 5-day moving average. Friday is options expiration. Typically, during expiration weeks, the intermediate market trend is sustained. In this case, expiration should help stocks appreciate.
DISH Network (DISH) is engaged in a lawsuit with VOOM. With Sprint (S) being mostly acquired by Softbank, there is some question how S will use its ~$8 billion of cash, including possibly buying spectrum from DISH. In any event, the options market has turned more cautious on DISH with a significant amount of selling in the January 5.5 call and the February 6 calls.
In Limited Brands (LTD), over 8,000 calls traded which is 15x the recent average daily volume. 71% of the call volume traded on the offer side. LTD is expected to report earnings on November 14.
In early trading this morning, we are seeing bullish flow in Southwest Airlines (LUV). There is a buyer of Oct 9 calls almost 5,000 times. The company reports on October 18 before the market open and the options expire on Friday, October 19.