Bulls Determined to Start May on Solid Footing

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Coming off the worst monthly showing by U.S. stocks so far in 2012, the bulls seem determined to regain control in today's session. With futures on the Dow Jones Industrial Average (DJI) and S&P 500 Index ( SPX ) pointed north of breakeven, traders may want to keep their eyes trained on:

  • that pesky 1,400 mark .
  • a slew of earnings and economic data. It's going to be a doozy of a week for bulls and bears alike, according to Equities Analyst Bryan Sapp.
Among equities in focus, Apple's (AAPL ) price movement could set up a ripple effect on the broader market; Veeco Instruments (VECO ) is poised for a big post-earnings pop; and Pfizer Inc. (PFE ) and Shutterfly (SFLY ) both reported their respective quarterly results.

And now, on to the numbers...

Dow, S&P and Nasdaq futures

Market Statistics


Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 984,949 call contracts traded on Monday, compared to 646,400 put contracts. The resultant single-session put/call ratio arrived at 0.66, while the 21-day moving average was 0.63.

NYSE and Nasdaq summary

Volatility indices

From the Trading Floor

In today's session, Sapp will also be eyeing "the materials sector -- coal and steel names were strong Monday, and both should have a reaction to today's Institute for Supply Management ( ISM ) manufacturing number . Also, AAPL . Big down day yesterday -- if it can't get any traction then the market could be trouble."

Sapp continues, "On the sentiment front, I still see bears getting bolder and bolder. It's ironic because we're only about 3% off of 52-week highs here, and bears seemed convinced that we have to go lower because the data is getting worse. This could set the stage for a contrarian long play and the potential for short covering."

Currencies and Commodities

  • The U.S. dollar index is rolling around breakeven this morning, with the greenback last seen at $78.76.
  • Crude oil is continuing to pull back , with the front-month contract down 0.3% at $104.60 per barrel.
  • Gold futures are pointed south, as well, with gold for June delivery 0.1% lower at $1,662.70 an ounce.

Currencies and commodities

In earnings news, Pfizer Inc. (PFE - 22.90) said its first-quarter profit fell 19% to $1.79 billion, or 24 cents per share. Excluding items, earnings arrived at 58 cents per share. Due in part to declining sales of its cholesterol drug, Lipitor, PFE's revenue backpedaled 7% to $15.41 billion. The results were mixed, with analysts calling for an adjusted per-share profit of 56 cents on $15.47 billion in sales. The majority of analysts are in PFE's corner, with no fewer than 88% maintaining a "buy" or better recommendation toward the stock. PFE is trading 0.7% lower ahead of the bell.

Veeco Instruments (VECO - 30.19) reported a first-quarter profit of $16.4 million, or 42 cents per share, down 69% year-over-year. On an adjusted basis, VECO earned 49 cents per share, while net sales declined 45% to $139.9 million. The report handily beat Wall Street's expectations, which called for a profit of just 19 cents per share on $126 million in revenue. Short sellers reduced their exposure by 13.3% over the last two reporting periods. VECO is on pace to start the session with an 18.9% pop.

Shutterfly (SFLY - 31.16) widened its first-quarter loss to $10 million, or 29 cents per share, while revenue surged by 59.6% to $91.3 million. The results surpassed analysts' expectations for a loss of 32 cents per share on sales of $84.6 million. Short-term speculators were picking up puts ahead of earnings, with SFLY's Schaeffer's put/call open interest ratio (SOIR) docked at a put-heavy 1.43. In pre-market trading, SFLY is up 9.1%

Earnings and Economic Data

Today's economic calendar features the ISM manufacturing index , construction spending, and auto sales . On the earnings front, Arch Coal ( ACI ) , Archer Daniels Midland ( ADM ), Automatic Data Processing (ADP) , Avon Products (AVP), Biogen Idec (BIIB), BP (BP), Broadcom (BRCM), Chesapeake Energy (CHK) , Office Depot (ODP), OpenTable (OPEN) , P.F. Chang's China Bistro (PFCB), Sirius XM Radio (SIRI) , and Valero Energy (VLO) will all unveil their quarterly results.

Overseas Trading

It was a light-volume session in Asia today, with traders in Tokyo returning from a long weekend to follow suit with Wall Street's selling mood. Corporate heavyweights Sharp and Honda Motor were among the notable laggards, thanks to disappointing quarterly results. With most other regional bourses closed for holiday, Japan's Nikkei ended the day down 1.8%.

Likewise, many traders in Europe have the day off. In Britain, oil major BP turned lower post-earnings, but a well-received quarterly report from Lloyds Banking Group provided a halo lift for financial stocks. With markets in Germany and France closed, London's FTSE 100 was last seen up 0.4%.

Overseas markets

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .

Unusual options activity - puts

Unusual options activity - calls

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Options

Referenced Stocks: ACI , ADM , CBOE , ISM , SPX

Schaeffer's Investment Research

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