Stocks look to rebound on today's triple-witching Friday, which many are now considering a quadruple-witching with the recent addition of single stock futures.
Buyers may be scarce as some of the major indexes trade near heavy open interest, specifically the S&P 500 Index (SPX.X), which is posting a 7 point gain at 891, with heavy open interest at the 900 strike in both the put and calls. I'm going to project an SPX close of 894, which would be between the 888-900 trading range discussed in our Index Trader Wrap earlier this week.
This morning's Dow Industrials high of 8,465 came right near yesterday's morning breakdown of 8,468, and with 8,500 as a potential target, bulls may be hesitant for a push high.
One stock I've got an eye on in the Dow, which finds resistance at a large open interest of $80, is shares of IBM (NYSE:IBM) $79.73 +1.37%, where we've seen a morning high of $79.98, just 2- cents shy of the $80 strike. While option expiration isn't the most "controlling factor," for stock and market price action, traders will look for heavy open interest strikes and can influence today's trade on expiration. Volatility can come should a key strike be achieved, then exceeded.
Sector action is broadly positive with the Gold/Silver Index (XAU.X) 73.95 -0.69% showing a rebound from the lows of 72.77, which is just above the 71.84 level of retracement we've been working with.
The Morgan Stanley Health Provider Index (RXH.X) 272.78 -1.41% shows this morning's greatest weakness. Sector component Tenet Healthcare (NYSE:THC) 15.69 -7.92% leads the sector lower after being halted for trading during the bulk of yesterday's session. The company said it had been served with federal search warrants by the U.S. Attorney's Office in San Diego regarding two administrative offices at Alvarado Hospital Medical Center.
The Securities Broker Dealer Index (XBD.X) 426.60 +1.2% is among today's sector winners ahead of what many expect to be a landmark billion dollar settlement of Wall Street's research scandals.
While top executives would likely be spared prosecution, firms involved in the talks are expected to pay fines of more than $1 billion. Part of the money paid by the firms is expected to go to a restitution fund for investors.