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Optionity Daily Report 02/04/2013

|Includes:AXP, CHL, CSCO, F, GE, INTC, KO, MDLZ, MMM, MSFT, ORCL, PEP, PFE, QCOM, SPDR S&P 500 Trust ETF (SPY), SYY, TEVA, TSM, UTX, VOD, WM

Date: February 4, 2013

Daily Market Statistics

Source: Barrons

S&P 500 5-Day Daily Chart

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Source: Google Finance

Economic Calendar

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Source: Briefing

Options Market Recap

The market sentiment was driven by extreme greed with Fear & Greed Index at 81, which had decreased from the previous close of 88. As reported by CBOE, the total put/call ratio was 1.10 for the day. The index put/call ratio was 1.42, and the equity put/call ratio was 0.69. The CBOE volatility index (VIX) put/call ratio was 0.80. The top bullish stocks had been identified through our daily options scanning process, with the scanning criteria where the daily call option volume ratio was above 2.00 (2x of the average call option volume) with a call option volume above 10,000. Unusual option activities can be an indicator or precursor of a major movement for the underlying stock.

For the complete list, please visit HERE.

Source: Schaeffer's Research

Market Volatility and Analysis

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For Option Equity Put/Call Ratio, the MACD (12, 26, 9) is showing a bearish trend but the MACD difference converged. RSI (14) is picking up. It could signal a market reversal if the MACD becomes bullish.

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SPY opened lower and closed lower with 1.16% loss. The volume was 30.70M. On weekly basis, the MACD (12, 26, 9) is showing a bullish trend but the MACD difference diverged and closed at 0.729 (decreased from 0.811). SPY is currently trading above its 200-day MA of $117.68 and its 50-day MA of $138.86. RSI (14) decreased to 64.02 from 68.46 with decreasing buying momentum. The next resistance is $154.09 (R1), followed by $161.81 (R2).

Optionity Core-20 Options Portfolio (Credit Put Strategy)

Stock criteria:

  1. Large Cap with low beta
  2. Fair/Under-valued
  3. Consistent, strong earnings
  4. Dividend distribution
  5. High liquidity, large volume
  6. Good/strong economic moat

This options portfolio consists of 20 core stocks. The portfolio will employee mainly the credit put strategy with the primary objective of generating consistent cash flow. The portfolio focuses on 1) sufficient sector diversification 2) risk/reward ratio control 3) margin of safety by leveraging options.

Daily portfolio performance will be updated at Seeking Alpha Instablog and Optionity.com.

Transaction details will be updated whenever new position is opened or the existing position is closed/expired/adjusted.

Pending transaction(s) to be setup:

For the pending transaction(s), please visit HERE.

Core-20 Stocks Update

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Stocks: SPY, AXP, CHL, CSCO, F, GE, INTC, KO, MDLZ, MMM, MSFT, ORCL, PEP, PFE, QCOM, SYY, TEVA, TSM, UTX, VOD, WM