Halftime Report: Beware Quadruple Witching
Stocks were swinging in a wide range Friday as quadruple witching brought squalls of buying and selling.
How should you game stocks, amid these sharp and unexpected moves?
Instant Insights with the Fast Money traders
I’m watching Visa on Friday, reveals Steve Grasso. It’s is being added to the S&P 500 and indexers will have to make adjustments. I think it could pop at the closing bell. And broadly, as long as we stay above 1085 in the S&P 500, I’m a buyer of this market.
I’m also a buyer into the close, reveals Katie Stockton of MKM. Quadruple witching has triggered a volume spike and that’s more often bullish than bearish.
Also, I’m watching Citi , adds Stockton which is oversold from a technical standpoint. It’s trading below its 200-day moving average. But it’s also lacking a technical catalyst.
I think the pullback in Citi is a decent buying opportunity, counters Brian Stutland of Stutland Equities. I’d start to dabble. It seems like things are turning around in the economy and as a result I think this and most banks will be okay.
I agree, echoes Steve Grasso. I would also add to my Citi position at these levels.
Looking at the broader market, I’m a buyer of the S&P below 1100 and a seller above it, adds Brian Stutland. During quadruple witching the market tends to gravitate to a marquis numbers like that.
RIM, Nike, Oracle and Palm are the 4 stocks that I’m watching on Friday, reveals OptionMonster Jon Najarian. Those are the 4 stocks that are moving. Outside of those 4 I find it to be a dull expiration.
For the month of December the Vix has been trading near the low 20s. That’s down about 43 percent from January, and is off by 72 percent from its all time high of 80.86, reached in the midst of the economic panic in November 2008
What should you expect from the Vix going forward?
I’m seeing institutional traders predicting the Vix to remain around 22.5 level for the next several months, reveals Brian Stutland. That suggests the stock market itself will only make 1%- 1.5% moves on a daily basis. I interpret that kind of action as bullish because the stock market can grind slowly higher and form bases.
But into the end of this year, I’m seeing options action which suggests to me that we could see volatility pop, adds Jon Najarian – but that’s ahead of Dec. 31st.
TECH TRADE ROARS BACK TO LIFE
Around lunchtime the tech heavy Nasdaq was the only major index to traded solidly in positive territory, with bulls gaining a foothold on the back of strong earnings from Oracle and RIM.
The results stoked hopes that technology spending is on the mend after it collapsed a year ago in the recession. Oracle, which reports earnings a month ahead of its peers, is seen as a bellwether for the industry because of its size.
What’s the tech trade?
I think the buying opportunity is in Palm , says Jon Najarian, but today is probably too early. And I’m happy to take money off the table in RIM. The stock seems ahead of itself.
From a technical perspective, RIM is attractive here, counters Katie Stockton, The stock traded above gap-based resistance on its chart, - at $71.42. That kind of action suggests to me RIM could go to $80 within the next few weeks.
OIL UP ON IRAN INCURSION
Oil rose toward $74 a barrel on Friday after an Iraqi official said Iranian troops had crossed into an oilfield in Iraq, and on the prospect of increased winter demand.
Deputy Interior Minister Ahmed Ali al-Khafaji, reversing statements made earlier in the day, said the Iranian soldiers had crossed into Iraqi territory and taken up position at a southern oilfield whose ownership is disputed by Iran.
The minister said the incursion on Friday was the latest in a series this week.
Also, a cold snap gripping the U.S. Northeast, the world's top heating oil market, also supported the oil market - largely offsetting any weakness that a stronger dollar may cause.
What’s the trade?
You’d think oil prices would be a lot higher on the Mideast tension, muses Joe Terranova. That's a 'tell." I wouldn’t short oil but I wouldn’t establish a long position either.
FAST & FURIOUS: THE KEY QUESTIONS INTO THE CLOSE
BUY OXY? BofA initiated coverage of Occidental with a buy rating; should you buy, too?
I like it says, Steve Grasso.
BUY EMC?EMC traded higher after Goldman added the name to its conviction buy list; should you get in?
I’m a buyer, reveals Jon Najarian.
BUY TTWO?Take Two traded higher after Carl Icahn took an 11% stake in the name; should you follow Carl and get in?
I think it’s okay to nibble, says Brian Stutland.
BUY MINERS? The gold miners are making a comeback today, should you get back in?
I would be a buyer, says Katie Stockton.
CALL THE CLOSE
Katie Stockton: I’m a buyer. We’re getting a volume spike and that’s more often bullish than bearish.
Brian Stutland: I’m a buyer of the S&P below 1100 and a seller above it.
Jon Najarian: I’m a buyer.
Steve Grasso: As long as we stay above 1085 in the S&P I’m a buyer.
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CNBC.com with wires