What to Expect Next Week and Open Interest for Septmeber 27th Expiration

Well now that the big Fed decision is out of the way, we can all focus our attention on the budget crises ;-). We have come a long way from the August lows in a pretty short amount of time.  September has been a great month for those that bought the dip. If you missed it, I think you will get another chance. Next week there are plenty of reasons to support the idea that we will pull back or at least hang out and consolidate. First, historically the week after September expiration tends to be bearish. You can read about that here.  Second, the market has become pretty extended and could use some time to digest its recent gains and allow for the moving averages to play catch up. And third, the media will likely begin to spew a ridiculous amount of garbage regarding the budget crisis as Congress gets back to work* (I use that term loosely).

I would look to buy any weakness we may get next week at key support areas for several reasons. One, Bernanke is the man. Two, we are still in a longer term uptrend. Three, end of the quarter mark ups will likely take place because of all those under-performing this quarter. Four, read my post from a couple days ago regarding a possible early Christmas and amazing opportunity. Areas of SPX support I would look to are 1700, 1688 (the gap from last weekend after L. Summers stepped down), and finally 1670/1672. I would be surprised if we dipped below that.

Open Interest and notes

 SPY – honestly I’m a bit surprised to see this many puts versus calls on SPY. We are already below the second highest puts of 171. The first is 170, which aligns well with the gap from last weekend.

AAPL – Chart not looking too hot right now beneath its 10 and 20 day MA’s, which are both pointing down. See if any sales news this weekend can pop it back up. Even if it does though it may not hold up long. Highest calls are at 480.

AMZN – Good breakout on volume on Friday. It did pullback quite a bit from the highs of the day, but given monthly expiration that could account for part of it. Holding Thursday’s breakout above 311 would be good. If not it will likely visit the 305 and 10 day MA area again. The highest calls are 325, 300 for the puts.

BIDU – Looks pretty good on the chart and holding up well. It would need to strongly get over 149.74 and the 150 high calls. 
CMG – I was bullish on CMG, but it closed very poorly on Friday with high volume. It also closed below its high puts, which is very rare for CMG signaling major weakness.  It is currently close to its 20 day MA of 413.37. If that does not hold it may go back to test the 50 day MA or breakout area of 395. Below that and you are into the gap. Highest puts at 400. 
FB – Facebook looked ripe to really breakout over 46, but of course waited to the very end of the day after all those September 46 calls likely closed out. Unfortunately that wasn’t enough time for a lot of option activity to take place for next week and the highest calls are still at 46 and 47. If we don’t see the breakout over 46 stick early in the week, watch for it to come back down a bit (likely a great buying opportunity if it does for end of the quarter).

GOOG – has been looking much stronger lately and seems to be setting up to move higher.  I like it long above 906/907 or at support if it gets back to 895. Below that and it may just need more time to set up. Highest puts at 880, calls at 900. 
LNKD – I’ve mentioned LNKD has been looking weak lately not participating in the rally like other high momentum stocks. It is now below its 10 and 20 day moving average. The next support area I would look to is 235 and if that doesn’t hold then look to the 50 day MA or the 222 breakout area. Highest puts at 240. 
NFLX – Simply put, looks amazing. Highest calls 330. 
PCLN –  If you have been following me for a while, then you know why I am about to say: BOOYA! :-). Don’t let that 4 digit number scare you. It looks great though it could digest a little and allow the MA’s to catch up a bit. Highest puts 960, calls 1,020. 
TSLA – Reminds me of the energizer bunny, it keeps going and going and going; and ironically it runs on battery :-).  The highest puts are 170 and the highest calls are 200.
Good luck next week.