E WhatsTrading Recap - 02/25/2015

Trading turned cautious Wednesday afternoon ahead of a flood of economic data Thursday and Friday.In addition to Weekly Jobless Claims, inflation (CPI) and durable goods numbers are likely to set the tone for morning trading tomorrow. GDP, PMI, U of Mich Sentiment, and pending home sales are slated for Friday morning.

Yet, the pattern of narrow market action continues. The S&P 500 has traded in a ten-point range today and, with 45 minutes left to trade, is down 3.5 points to 2112.

Treasury bonds are steady after Yellen’s two days of dovish testimony and the yield on the benchmark ten-year is 1.97%. Crude gained $1.56 to $50.84 and gold added $6.5 to $1204.

Energy (XLE) is outperforming due to the strength in oil, but not keeping pace with the consumer discretionary (XLY), which is up .7%. However, outside of those two sectors, it’s losses across the board Wednesday. Utilities (XLU) are the weakest.

CBOE Volatility Index (VIX) reflects a modest uptick in risk perceptions. The fear gauge is up .21 to 13.90 after hitting 2015 lows the day before.

Options volumes picked up a bit as stocks faltered in the second half of trading. Roughly 7.2 million calls and 6 million puts traded across the 12 options exchanges. Projected volume for the day is 15.5 million contracts and in-line with the one-month average.

There’s a feeding frenzy in McDonald’s (MCD) as shares see an inexplicable 4% spike. Players gobbled up a series of different March and April calls on the fast food company.

Facebook (FB) sees relative strength and increased options flow as well. With the stock up $1 to $79.45, players ‘like’ the Weekly and Mar 80 calls on the social media company. More than 25K traded at both strikes.

This Week’s 214-strike calls on the SPDR Trust (SPY) are the most actives, as some players seem to be positioning for market strength Thursday-Friday. 125,000 SPY Weekly (2/27) 214 calls have changed hands so far.


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