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Sentiment

Stock market averages are deep in the red on disappointing jobs data. According to the Labor Department, the US economy added just 80,000 jobs last month. Economists were expecting to see 100,000. The rest of the report was mostly in-line with expectations. The unemployment rate was unchanged at 8.2% and average hourly earnings ticked up .3%. European markets finished with sizable losses on the data. Spain’s IBEX paced the decline with a 3.1% slide. In the U.S., the Dow Jones Industrial Average opened lever and has failed to bounce during the session. The tech-heavy Nasdaq is lower and weighed down by disappointing guidance from storage device-maker Seagate Technology (NASDAQ:STX). Crude oil plummeted $3.15 to $84.07 per barrel and gold lost $30.1 to $1579.3 an ounce. The Dow Jones Industrial Average is down 147 points and 44 points off session lows. The Nasdaq lost 46. CBOE Volatility Index (.VIX) is unimpressed, up just .19 to 17.69. Trading in the options market is light, but reflects the cautious underlying tone. 5.3 million calls and 5.4 million puts so far.

Bullish Flow

Intel (NASDAQ:INTC) is off 53 cents to $26.02 and one of 28 Dow stocks trading lower Friday. An interesting four-way spread traded on the chipmaker on the ISE today, after one strategist bought a July 25 - 27 bearish risk-reversal on INTC for 2 cents, 33,400X, and sold the Oct 25 - 27 bullish risk-reversal at 17 cents, 33,400X. The activity probably rolls a position opened in early-February when the July bullish combo traded for 11 cents (see 2/6 color). Shares are down 4.3% since that time and, with two weeks left until the July expiration, the investor is now buying a few more months for the bullish position to play out. ISEE confirms that the July risk-reversal was closing and a new similar position opened in October. Intel will report earnings the afternoon of July 17.

Bearish Flow

SPDR Retail Trust (NYSEARCA:XRT) is off 71 cents to $59.81 and an Aug 55 - 58 (2X1) put ratio spread trades on the ETF for 11 cents, 15000X to open. Looks like a short-term bearish play on the retail sector with a max payout if XRT shares fall to $55 (~8%) through the August expiration (6 weeks). XRT was on a four-day 6% winning running higher and trading at two-month highs prior to today, even as retailers posted their worst June sales numbers in three years Thursday morning - MarketWatch.

Implied Volatility Mover

Interesting action in Alcoa (NYSE:AA) ahead of earnings. The company unofficially kicks off the second quarter reporting period Monday afternoon. The stock is down 26 cents to $8.66 in active trading approaching 20 million shares after Nomura cut its EPS estimates ahead of the results, citing weaker aluminum prices. Meanwhile, 55,000 calls and 17,000 puts traded in AA, which is 3X the daily average. The top trade is a 10,000-lot of January 9 calls for 76 cents when the market was 74 to 76 cents. It's tied to 480K shares at $8.63 and might close. More than 20,000 now traded. July 9 are the second most actives after more than 12,175 changed hands. 7,430 Weekly (7/13) $9 calls also traded. Overall, the call volume is high and clearly focused on the $9 strikes, but seems to include a fair amount of closing activity and a mix of buying and selling. 30-day ATM vols are moving up 5.5% to 39.5 ahead of the news. AA shares rallied 6.2% on 4/11 when earnings were last reported.

Unusual Volume Movers

Bullish flow detected in TakeTwo Interactive Software (NASDAQ:TTWO), with 5618 calls trading, or 7x the recent average daily call volume in the name.

Bullish flow detected in PSS World Medical (NASDAQ:PSSI), with 2045 calls trading, or 60x the recent average daily call volume in the name.

Bearish activity detected in Kohl's (NYSE:KSS), with 5964 puts trading, or 2x the recent average daily put volume in the name.

High options volume is being seen in Netflix (NASDAQ:NFLX), Patriot Coal (PCX) and EMC (NYSE:EMC).

Source: Friday Options Recap