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For bulls in search of headline relief, it’s been a case of “T.G.I.F.”, but mild and mixed interest is the order of the day as August expiration draws close. As of 10:45 ET the “Cubes” (QQQQ) and “SPYder” (SPY) are up fractionally from 0.08% to 0.28% on above-average expiration-related bull.

A hoisting of financial anchors, further shopping in retail names and price relief at the pump were and remain Friday’s catalysts for bulls. Spearheading from last night, the financial sector (XLF) is attempting a second session of bargain-hunting, but this time on some reports of interest.

After the close on Thursday, beleaguered insurer Ambac (ABK) announced the S&P’s Rating Services affirmed the company’s ‘AA’ financial strength designation and removed the name from its ‘CreditWatch Negative’ laundry list. Shares of ABK are up nearly 17.50% to 5.35.

Separately, celebrated currency speculator George Soros apparently opened up something other than an account at e*Trade. According to Reuters, the latest regulatory filings found the financier more than dabbling in shares of Lehman (LEH) this past quarter. Since June 30, his stake has increased from an aperitif of just 10,000 shares to a 6% interest representing 9.5M shares. Intraday shares of LEH are up .68 at 16.88, making his VWAP price tag a bit more attractive to be sure.

For a second straight day earnings news from a couple retailers has bulls shopping around in those names and sector. Results were a mixed-to-disappointing bag, but the reaction has taken on a decidedly optimistic bent. Shares of luxury department store operator Nordstroms (JWN) are up nearly 4% after beating by a penny but issuing below-consensus guidance.

‘Teen Dream’ Abercrombie (ANF) is up 2.25% at 53.75 after posting a lower profit and sales decline but announcing a $.175 dividend. Kohl’s (KSS) beat by four cents and lowered its Q3 views but investors have sent shares flying higher by 8.0% near 52.15. And apparently it’s not “all inside” at JC Penney (JCP) but there might be some returns down the road. The department store chain beat by two cents on in-line sales, but warned in delivering a Q3 outlook below Street views.

In officially-sanctioned economic reports, the news is also made to order for bulls looking to take a dip, rather than getting well-done on the grill. The NY Empire Index, a regional manufacturing survey, turned up from last month’s -4.9 reading and surprised expectations for a still-weak -4.2 in delivering an actual figure of 2.8. Separately, the Industrial Production & Capacity report beat by two tenths with an increase of 0.2% and matched estimates of 79.8% respectively. And finally, Consumer Confidence came in “good nuff” for traders in beating the prior reading by five-tenths but slightly below views at 61.7.

And finally, depending on which set of eyewear investors have strapped on, aggressively lower prices for crude (USO) and most all things commodity-related (GLD, GDX, MOO, DBA, GSG) means one of two things. For the optimists, the percentage swoon is attributed to continued strength in the US Dollar (UUP) with consumers and businesses ultimately reaping the benefit of lower prices. On the other hand, equity bulls looking for excuses to “schnitzel a little” or bears looking to spook, can bang the drum over the action being the net result of waning demand within a global slowdown. Entering the lunchtime hour and index prices exactly where we left ‘em; it seems to this market observer that Expiration Friday beckons in the here and now.

Chris Tyler
Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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The information offered here is based upon Christopher Tyler’s observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual. 

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