JP Morgan Chase (NYSE: JPM) became the biggest U.S. bank by deposits, acquiring Washington Mutual (NYSE: WM) branch network for $1.9 billion after the thrift was seized in the largest U.S. bank failure in history. JPM October option implied volatility of 65 is above its 26-week average of 48 according to Track Data, suggesting larger price movement.
Globex S&P futures trading 21.70 below previous day's SPX cash close after U.S. Republican lawmakers stalled urgent efforts to agree on a national economic rescue plan.
Financial Select Sector (NYSE: XLF) is recently trading at $19.50 in pre-open trading, below its close of $21.15 Friday. XLF September straddle is at $1.90, October is at $3.59. XLF September option implied volatility is at 100; October is at 66 above its 26-week average of 38 according to Track Data, suggesting larger price fluctuations.
Oil Services Holders (NYSE: OIH) is recently trading at $157.80 in pre-open trading, below its close of $164.21 Friday. Crude oil futures are recently down 5.51% to $95.60 according to Track Data. OIH holdings include BHI, BJS, DO, ESV, GRP, GSF, HAL, SLB, HC, NBR, NE, NOV, RDC, RIG, SII, SLB, TDW & WFT. OIH September option implied volatility is at 55, October is at 45 above its 26-week average of 37 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Minyanville Professor Quint Tatro dares to share the kind of keen insight and actionable information you won't find in any prospectus. For more original thought, visit www.minyanville.com.
There are a few things I am watching for today to give me better clues as to the internal character of the market.
Wal-Mart (NYSE: WMT): It's off on retail numbers after the stock broke out of a four-month consolidation pattern on good volume. If the stock catches a bid, it is an indication that institutional investors are back stalking retail plays and would be bullish for the general market.
Energy ETF (AMEX: XLE): Energy has recently broken a longer term trend going back to mid-2006. It is bouncing off recent lows on very light volume. If money continues to rotate out of this sector, finding a home in the likes of retail, housing and financials, again a bullish sign. I initiated a short position in XLE this morning.
Financial ETF (AMEX: XLF): Financials have been and will continue to be the key to the market's future. After recapturing the 50-day moving average, this ETF is being brought down by AIG (AIG) and needs to regain its footing. Some consolidation is fine, but anything back below $20 would have me heading back towards the bunker.
Homebuilders ETF (AMEX: XHB): The homebuilders continue to perk up and also remain a key to the future of the tape. They are probing green today above their 50-day moving average on decent early volume. A break here above yesterday's high going on to attack the $19.00 level is also a bullish sign.
These are things I am watching for which will give me my clues to start wading back into the market with real capital.
(Prof. Tatro has positions in WMT, XLE, XLF, XHB).
Wachovia Corp. (NYSE: WB) is recently up $1.33 to $14.45. Wachnovia reported Q2 EPS loss of ($1.27) ex items verses consensus estimates of ($0.78). WB lowered its quarterly dividend to $.05. WB will take a $6.1 billion goodwill charge for Golden West. WB August option implied volatility of 94 is below a level of 141 from July 21 and above its 26-week average of 59 according to Track Data, suggesting larger price movement.
Financial Select Sector SPDR (ETF) (AMEX: XLF) is recently up $.30 to $21.05. XLF August option implied volatility of 50 is above its 26-week average of 37 according to Track Data.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Financial Select Sector-XLF is recently down 32 cents to $17.40. XLF call option volume of 19,435 contracts compares to put volume of 38,221 contracts. XLF 17.5 straddle is priced at $1.46. XLF August option implied volatility of 76 is above its 26-week average of 36 according to Track Data, suggesting larger price movement.
GE July option implied volatility is at 38, August is at 32; above its 26-week average of 29 according to Track Data, suggesting larger price movement.
I primarily trade fun smallcap stocks, so until the past few days, I hadn't either. But when I began researching, I just kept finding more and more interesting ETFs -- it was addictive! Almost addictive as my new Twitter account where I've discovered I can chat with business legends, yesterday it was the founder of eBay Inc (Nasdaq: EBAY). Okay, maybe ETFs will never be that addictive!
Out the few hundred ETFs I looked into, here were some of the more interesting of the bunch:
MarketWatch has an interesting article today about homebuilder and financial ETFs. The article, titled "Analysts say financial, builder ETFs signaling buy," interviews a couple of leading analysts who feel that both sectors have bottomed out and are "screaming buys."
Morningstar analyst Sonya Morris said that the Financial Select Sector SPDR (AMEX: XLF) is trading "at least 25% below what Morningstar thinks they are worth."
MarketWatch said in the same article, "Most of the analysts agree that valuations are attractive right now in the financial sector. They said that once the sector gets past the problems with the subprime crisis, probably by the end of this year, the shares could move fast."
I think these analysts are probably right, but that we're probably not through going down in the short term.
Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
How should you invest $10,000 in the coming year? The question was posed to some of Wall Street's most respected seers by syndicated columnist Andrew Leckey, whose Successful Investing column appears in over 150 newspapers.
Here, courtesy of The Bull & Bear Financial Report, 9 leading Wall Street experts -- Elaine Garzarelli, Richard Crippps, Sheldon Jacobs, Don Phillips, Richard Yamarone, High Johnson, Mark Johannessen, Curt Weil, and Paul Nolte -- offer their answers to the $10,000 question.
"Amid relentless volatility in 2007, every participant last December produced an increase over the past 12 months. Our pundits for a second consecutive year are spreading their bets because there are so many economic and political wild cards in the coming presidential election year.
"One of our favorite areas going forward for the next 1-5 years are the financials at these levels," says Daniel Frishberg, editor of TheMoneyMan Report and host of BizRadio. Here he looks at an ETF for the sector.
"The global growth story isn't going away and there are a ton of deals that need to be financed, trading volumes are high, private equity is still huge, and it takes big financial institutions to keep all of this running. They are really the fuel that keeps the (globally) economy expanding.
"Financials got caught up in the easy money craze by creating and buying risky derivatives. Many of the CEOs have already been fired and the books are being cleaned up by huge write downs. We think over the next couple of years, financials could actually gain the most on a return basis.
"This has been an area we have pretty much avoided or had very little exposure to. We continue to hold Citigroup (NYSE: C) in our capital gains portfolio and will average down at some point in the near future. But, for today, we want to buy the industry and dip our toe.
The good news is that results this week from several leading Wall Street firms, including Goldman Sachs Group Inc. (NYSE: GS) and Lehman Brothers Holdings Inc. (NYSE: LEH), were better than many had feared.
The bad news is that the continuing crisis in global credit markets and the long-running technical relationship between broker/dealer's shares and other financial stocks suggest the former may still have plenty of room left on the downside.
It's no secret that financial and consumer stocks have been slammed this year. Since January, the S&P financial sector has shed 21.3% while the S&P consumer discretionary sector has lost 14.2%. That compares to a 2.2% gain in the S&P 500 index.
While it is likely far too early to call for a bottom in either group, a quick read of the technical relationship between the two sectors going back several years suggests it might nonetheless be time to bet on banks, brokers, and other financials while wagering on further weakness in the shares of companies that are most exposed to a slowdown in personal spending.
Arguably, this particular pairs-trade probably jibes with how traders are positioned and the near-term fundamental outlook. Right now, many people are afraid of what bombshell might hit the financial sector next. Yet as far as the economy goes, the majority of central bankers, analysts, and various Polyannas still seem to be expecting -- hoping -- that any slowdown we see will be mild, at worst.
In sentiment terms, at least, that suggests the former group has a decent amount of bad news priced in. In contrast, shares in the latter group could be vulnerable to downside surprises, especially given that we are now in the midst of the crucial holiday selling season.
Over the past 12 months, the S&P Supercomposite Life and Health Insurance Index has risen by 10.73%, outpacing the 2.29% gain in the S&P 500 index and the 18.17% loss in the S&P financial index -- which has an equivalent exchange-traded fund, the Financial Select Sector SPDR ETF (AMEX: XLF).
Unlike other financial shares, many of which have suffered the ill effects of billion-dollar writedowns and continuing upheaval in global credit markets, some insurance stocks have been seen as something of a safe haven. With their large investment portfolios, insurers have also benefited from strength in global equity markets, at least until recently.
No doubt the question remains open whether life and health insurers are immune to the contagion being felt elsewhere. Regardless, the appearance of a bearish double top in both the absolute and sector-relative charts suggests the group is due for at least a short-term pullback.
Financial Select Sector SPDR (AMEX: XLF) is recently down $1.05 to $29.46. XLF call option volume of 16,078 contracts compares to put volume of 59,665 contracts. XLF December option implied volatility of 40 is above its 26-week average is 25 according to Track Data, suggesting hedging for continued downside risk.
Dicks Sporting Goods Inc. (NYSE: DKS), an operator of 314 sporting goods stores, is expected to report EPS of five cents on November 20 according to Thompson First Call. Nollenberger Capital Partners says, "we would use this pullback as a unique opportunity to buy the stock at a compelling valuation." DKS December option implied volatility of 64 is above its 26-week average of 34 according to Track Data, suggesting larger price action.
Even though there's been a lot of talk about weakness in the financial sector, which stems from the meltdowns in housing and the subprime finance markets, some sub-groups have performed better than others.
Surprisingly, given recent headlines about multi-billion-dollar writedowns at Merrill Lynch & Co. Inc. (NYSE: MER), for example, one of the best-performing sub-groups relative to the broad universe of financials includes the shares of investment banks and brokers.
JP Morgan Chase (NYSE: JPM) became the biggest U.S. bank by deposits, acquiring Washington Mutual (NYSE: WM) branch network for $1.9 billion after the thrift was seized in the largest U.S. bank failure in history. JPM October option implied volatility of 65 is above its 26-week average of 48 according to Track Data, suggesting larger price movement. 
Minyanville Professor Quint Tatro dares to share the kind of keen insight and actionable information you won't find in any prospectus. For more original thought, visit 
Wachovia Corp.
If you've ever delved into investing in ETFs (exchange-traded funds, basically entire indexes and sectors that trade like stocks), you're already familiar with the most popular, those being 
The good news is that results this week from several leading Wall Street firms, including Goldman Sachs Group Inc. (NYSE: 
It's no secret that financial and consumer stocks have been slammed this year. Since January, the S&P financial sector has shed 21.3% while the S&P consumer discretionary sector has lost 14.2%. That compares to a 2.2% gain in the 
Over the past 12 months, the S&P Supercomposite Life and Health Insurance Index has risen by 10.73%, outpacing the 2.29% gain in the 
Financial Select Sector SPDR
Even though there's been a lot of talk about weakness in the financial sector, which stems from the meltdowns in housing and the subprime finance markets, some sub-groups have performed better than others.
John McCain, losing ground, goes for broke tonight
If nothing else, gasoline prices are falling!
Closing Bell: Dow slump puts bulls on suicide watch; BAC, MS, F, FSLR all down, AMD up
