WhatsTrading Recap - 01/29/2015

Stocks are at session highs heading into the final 30 minutes of trading. Market action was mixed through mid-morning, but the S&P 500 had forged modest gains into midday. The rally gathered additional momentum in afternoon trading on reports Fed Head Janet Yellen told Democrats that the economy has a long way to go. No rate hikes are imminent.

End of month position squaring is likely a factor as well because tomorrow is the last day of trading for January. Upbeat stock news from Boeing (BA) and McDonald’s (MCD) is helping drive a 200-point gain in the Dow.

After dropping to 1989 in morning action, the S&P 500 is up 18 to 2020 and near session highs. Treasury bonds are steady after the big post-FOMC gains yesterday. The yield on the benchmark ten-year is 1.75%.

Crude is steady at $44.65 and it’s a rough day for gold bugs. The yellow metal shed $29 to $1257.

CBOE Volatility Index (VIX) is off 1.44 to 19 and probing session lows amid active trading in the options market. Roughly 8.1 million calls and 8.1 million puts traded across the exchanges. Overall volumes are running about 14% more than normal.

Weekly (1/30) 200 puts on the SPDR 500 Trust (SPY) and Weekly (1/30) Jan 120 calls on Apple (AAPL) are the one and two most active options for a second day.

One of the biggest trades is in MCD, as shares rally 5% on news CEO Don Thompson is stepping down. An investor bought a February – March 95 call spread on MCD, 37000X. The activity is closing out a hefty block of Feb 95 calls on the news and opening a new position in the March term.

Another, less bullish print today, is a buyer of 40,000 June 7 puts on VALE for 90 cents per contract. The cash outlay of $3.6 million seems to be expressing concerns about additional losses in shares of the Brazilian energy company after one week 20% drop in VALE.

Our systems also picked up bearish flow in AOL, Huntsman (HUN), and the iShares Germany Fund (EWG). Bulls are circling Rio Tinto (RIO), Spirit Airlines (SAVE), and 3D Systems (DDD).