SOME Recommendations Performance
August 27, 2010
Success is simple. Do what's right, the right way, at the right time.
Success is simple. Do what's right, the right way, at the right time.
Another great week has been had, due to the continued volatility of the market, for recommendations, therefore profits have grown accordingly. As the market has fluctuated we have been able to capitalize on this situation, and members who followed these recommendations for the past week were able to enjoy a 480% gain.
We have had a terrific run in the past few weeks and are very pleased with our success!
Here are the gains on some of the stock options recommended by SOME during the last week:-
Apple Inc. (AAPL)………….27%
American Eagle Outfitters (AEO)……….10%
Intuitive Surgical, Inc. (ISRG)…………….14%
Duke Energy (DUK)…………….21%
Tenet Healthcare (THC)…………….12%
Wal-Mart Stores, Inc. (WMT) …………….10%
Burger King Holdings Inc. (BKC).…………….13%
Starbucks Corporation (SBUX)………….35%
Intel Corporation (INTC)…………….45%
VMware, Inc. (VMW)…………22%
Lowe's Companies (LOW)……………25%
Bank of America Corporation……………10%
Research In Motion Limited (RIMM)……………95%
World Fuel Services Corporation ………….15%
Congratulations on a great week and let’s keep the profits rolling!
If you are not already a member of Stock Options Made Easy, then you may wish to become one so that you can benefit from the profits that are being generated!
Friday saw the stock market rebound to post their best gains in nearly four weeks, overcoming initial skittishness brought on by a revenue warning from Intel and dour comments from Federal Reserve Chairman Ben Bernanke.
Strong buying interest at a key technical level and short-covering sparked the market's comeback, and the tone improved as investors took a more positive view of Bernanke's comments about the economy and the Fed's readiness to act.
After a brief trip into the red this morning, stocks eventually powered higher thanks to reassuring remarks from Federal Reserve Chairman Ben Bernanke. At a conference in Jackson Hole, Wyo., the central banker pledged to do whatever's necessary to resurrect the U.S. economy, should "unexpected developments" stifle the recovery. The promise did more than just pacify the Street, with investors essentially shrugging off a downwardly revised forecast from Intel Corp. (INTC) and another 787 Dreamliner delay from fellow blue chip Boeing Company (BA). What's more, the bulls even triumphed despite a Commerce Department report showing second-quarter gross domestic product rose at a slower pace than previously estimated, with the major market indexes paring the majority of their weekly deficits by the close.
Further reflecting investors' revived appetite for riskier assets was the action in the bond markets, according to Schaeffer’s Senior Technical Strategist, Ryan Detrick, who noted the heftiest single-session drop for the iShares Barclays 20+ Year Treasury Bond (TLT) exchange-traded fund in over a year. "Proving we all can't win all the time, it was a great day for stocks, but a horrible day for bonds. The risk trade was off for the day, as money came running out of the safety play and into risky assets," he said.
The market is starving for something decent to look at," said Rob Russell, president of financial planning firm Russell & Company.
Second-quarter GDP, the broadest measure of economic activity, was revised sharply lower, but was less drastic than forecast. Meanwhile, Fed Chairman Ben Bernanke said the recovery is sputtering, but stressed that the Fed has the tools to ensure continued growth.
"None of this is good information, [but] the GDP revision was better than what people were looking for, and the fact that Bernanke outlined some options about what the Fed could still do and is willing to do has helped an uptrend," said Russell.
Results for Major Market Indexes
The Dow Jones Industrial Average (DJIA – 10,150.65) finished the day, with a good gain of 164.84 points, or 1.65%.
The S&P 500 Index (SPX – 1,064.59) also had a nice gain, on the day, of 17.37 points, or 1.66%.
The Nasdaq Composite (COMP – 2,153.63), also had a gain of 34.94 points, or 1.65%.
The Russell 2000 Index of smaller companies had a big gain of 17.00 points, or 2.83%, to settle at 616.76.
By the close of the Week:
The Dow Jones Industrial Average (DJIA) ended the week down by 0.62%.
The S&P 500 Index (SPX) ended down 0.66% for the week.
Meanwhile, the Nasdaq Composite (COMP) finished the week, also with a deficit of 1.18%.
Stocks that benefit from a strong economy were among the day's winners, with Caterpillar Inc (NYSE:CAT) and Boeing (NYSE:BA) lifting the Dow. Caterpillar rose 3 percent to $65.90 and Boeing gained 3 percent to $63.16.
Shares of 3PAR Inc (NYSE:PAR) surged 24.7 percent to $32.46 after Hewlett-Packard Co (NYSE:HPQ) again raised its buyout offer for the data storage company, leapfrogging a bid from Dell Inc (NasdaqGS:DELL). HP, a Dow component, dipped 0.6 percent to $38, while Dell rose 1.2 percent to $11.89.
Energy and materials shares also led the way up as the price of oil rose more than 2 percent over $75 a barrel. The S&P energy group (SNP:^GSPE) jumped 2.8 percent and Chevron (NYSE:CVX) gained 2.2 percent to $74.93.
About 7.99 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's estimated daily average of 9.65 billion.
Advancing stocks handily outnumbered declining ones on the NYSE by 2,608 to 392, while on the Nasdaq, advancers beat decliners 2,165 to 470.
Notes of Interest….
• The Dow Jones Industrial Average’s (DJIA) reclaimed the 10,000 level.
• The S&P 500 Index (SPX) successfully surmounted short-term resistance in the 1,060 region.
• Nasdaq Composite (COMP) was stifled by its 10-week moving average.
• Crude futures finished higher for the third straight session today, as Fed Chairman Bernanke vowed to take action if the economic recovery begins to falter. The promise weighed on the value of the greenback, boosting the appeal of the dollar-denominated commodity among foreign-currency holders. Against this backdrop, crude oil for October delivery advanced $1.81, or 2.5%, to end at $75.17 per barrel – black gold's first finish north of $75 per barrel since Aug. 18. For the week, the front-month contract added 2.3%.
• Gold futures ended a wishy-washy session just fractionally higher today, as Bernanke said the central bank would take measures to resist deflation. By the close, December-dated gold futures gained 20 cents, or less than 0.1%, to settle at $1,237.90 an ounce. For the week, the front-month contract added 0.7%, marking the malleable metal's fourth straight weekly gain. Elsewhere, September-dated silver futures tapped a multi-month peak of $19.34 an ounce early in the session, ending the week with an impressive gain of 5.8% -- silver's best week-over-week performance since early April.
• Bonds: The yield on the 10-year Treasury note rose to 2.6% from 2.5% late Thursday.
U.S. economic growth slowed more sharply than initially thought in the second quarter, held back by the largest increase in imports in 26 years, a government report showed on Friday.
Gross domestic product expanded at a 1.6% annual rate, the Commerce Department said, instead of the 2.4% pace it had estimated last month.
However, the reading was a touch better than market expectations. Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, revised down to a 1.4% growth rate. The economy grew at a 3.7% pace in the first three months of the year.
The slackening economic recovery is a major political challenge for the Obama administration and the Democratic Party two months away from crucial mid-term elections that could shift the balance of power in Congress in favor of Republicans.
A Reuters/Ipsos poll this week found Obama's approval rating at 45% overtaken for the first time by a 52 percent disapproval rating.
The revised GDP data will likely fuel analysts' concern that slowing growth is putting the economy at growing risk of slipping back into recession. Federal Reserve policymakers were meeting on Friday at their annual retreat in Wyoming to ponder the economy's direction and hear from Fed Chairman Ben Bernanke.
"There is no doubt we are losing momentum in the economic recovery," said Robert Dye, senior economist at PNC Financial Services in Pittsburgh. "But if we define recession as two or more consecutive declining quarters of GDP, I think we are not going to go there.
"We are going to see a pattern where we may have declining GDP in one quarter followed by smaller gains in the next quarter, bouncing along the bottom as it were," Dye said.
The recovery from the worst economic downturn since the Great Depression had been largely fueled by a $862 billion government stimulus package and businesses rebuilding inventories from record low levels.
Growth in the last quarter was stifled by a 32.4% surge in imports, the largest since the first quarter of 1984, dwarfing a 9.1 percent rise in exports. That created a trade deficit, which sliced off 3.37 percentage points from GDP, the largest subtraction since the fourth quarter of 1947.
A smaller contribution from business inventories than initially estimated also restrained output.
Business inventories increased only $63.2 billion, rather than $75.7 billion, adding a slim 0.63 percentage points to GDP. Inventories, which had been a major driver of the recovery that started in the second half of 2009, increased $44.1 billion in the first three months of the year.
Excluding inventories, the economy expanded at a 1.0% rate, instead of the 1.3% pace reported last month.
There were some bright spots in the report, with growth in consumer spending revised up to a 2.0% rates from 1.6%. Consumer spending grew at a 1.9% rate in the first quarter.
Stubbornly high unemployment has dampened consumer spending, which normally accounts for 70% of U.S. economic activity. Spending added 1.38 percentage points to GDP last quarter.
Although businesses have been reluctant to hire new workers, they have been splurging on equipment and software, which also contributed to the surge in imports. Business investment was revised up to a 17.6%rate, the largest increase since the first quarter of 2006, from the previously estimated 17% pace.
Investment in equipment and software was the strongest since the fourth quarter of 1983.
Spending on structures was revised to show a far smaller increase than previously estimated but still posted the first rise in spending on structures since the second quarter of 2008.
Growth in new home construction was revised down slightly to 27.2% from 27.9%. The sector, which was a drag on growth in the first quarter, was lifted by a spurt in building activity spurred by a popular home-buyer tax credit that has since expired. The rate of increase was still the biggest since the third quarter of 1983.
Residential investment had contracted at a 12.3% rate in the first quarter.
The GDP also showed corporate profits rose 2.9% in the second quarter after increasing 5.8% in the first three months of the year.
Federal Reserve Board Chairman Ben Bernanke said Friday that the central bank would not sit idly and let the U.S. economy sink into a period of deflation.
"The Federal Open Market Committee will strongly resist deviations from price stability in the downward direction," Bernanke said in a speech opening the Fed's annual summer policy retreat.
Bernanke downplayed concern that the economy would fall back into another downturn, or a double-dip recession.
He said the economy would continue to grow at a slow pace in the last four months of the year and the pace of growth would pick-up in 2011.
Bernanke said there was only a low risk of deflation. But he acknowledged that inflation has dropped to a level slightly below that which FOMC participants view "as most conducive to a healthy economy in the long run."
But he spoke at length about the tools left in his toolkit to fight deflation and promised to use them if the outlook deteriorated significantly.
Responding almost directly to an op-ed published Thursday by ex-Fed vice chairman Alan Blinder saying the Fed was running low on ammo, Bernanke said: "The issue at this stage is not whether we have the tools to help support economic activity and guard against disinflation. We do. As I will discuss next, the issue is instead whether, at any given juncture, the benefits of each tool, in terms of additional stimulus, outweigh the associated costs or risks of using the tool."
At the top of his list of options -- more purchases of Treasurys by the Fed. Bernanke said these purchases would ease financial market conditions.
He said the central bankers thought that buying Treasurys was the proper course of action but noted "we do not rule out changing the reinvestment strategy if circumstances warrant."
Bernanke said the FOMC "has not agreed on specific criteria or triggers for further action."
U.S. stocks turned lower after the Bernanke speech was published, though his speech also coincided with a revenue downgrade by the world's leading chipmaker, Intel.
In early August, the Federal Open Market Committee took a baby step toward further quantitative easing by deciding to hold the size of the Fed's balance sheet constant through reinvesting principal repayments from mortgage securities into Treasurys. Bernanke described that option Friday as avoiding "an undesirable passive tightening of policy that might otherwise have occurred."
A slowing economy has caused the Fed to swiftly reconsider its policy stance - shifting away from an exit strategy towards consideration of further easing.
The economy is slowing at a time when the Fed has already cut interest rates to close to zero. Since March 2009, the Fed has promised to keep rates low for an "extended period."
Bernanke said the FOMC would consider modifying the language to communicate to investors that it plans to keep the federal funds rate low for a longer period than is currently priced in markets.
He also said the Fed could lower the rate of interest the Fed pays banks on the reserves they park at the central bank, though he stressed that the effect in isolation would likely be relatively small.
One policy option Bernanke rebuffed was to increase medium-term inflation goals above levels consistent with price stability. "I see no support for this option on the FOMC," the central bank chief said.
He didn't mention buying private assets like credit-card receivables or corporate debt, as some economists, including Blinder, suggest.
U.S. consumer sentiment pulled back in late August from earlier in the month but still improved from late July in the face of dismal labor and housing conditions, a private survey released on Friday showed.
The modest pickup in consumer mood came after a drop in July to the lowest level since November, according to Thomson Reuters/University of Michigan's Surveys of Consumers.
The survey's final August reading on the overall index of consumer sentiments was 68.9, below the 69.6 earlier this month but above the 67.8 at the end of July.
Analysts had expected a final August figure of 69.6.
"The good news is that consumers have shown some resilience in the face of slowing economic growth and the media's double-dip drumbeat," Richard Curtin, director of the surveys, said in a statement.
"The bad news is that consumers expect lackluster income and job growth for an extended period of time," he added.
While an outright decline in consumer spending -- which drives nearly 70% of the U.S. economy -- is unlikely, the chances for a double-dip recession is now "uncomfortably high" at 25%, Curtin said.
Consumer spending has been buoyed by discounts at stores and malls and by car dealers' cheaper financings, Curtin said. The survey's barometer of current economic conditions held steady from its earlier August reading at 78.3, up from 76.5 in July. Analysts had predicted a figure of 78.0.
The consumer expectations index ended at 62.9 for the month, down from earlier 64.1 but up from 62.3 in July. Analysts had forecast a reading of 63.5.
The measure of consumers' 12-month economic outlook stood at 69, unchanged from early August and up from 66 in July.
The survey's one-year inflation expectations measure dipped back to the end-July level of 2.7% after ticking up to 2.8% in early August.
European Markets shares rallied. The CAC 40 in France and Britain's FTSE 100 ended 0.9% higher, and the DAX in Germany gained 0.7%.
Asian Markets ended mixed. Japan's benchmark Nikkei index added 1.7%, and the Shanghai Composite rose 0.3%. The Hang Seng in Hong Kong fell 0.3%.
The dollar fell against the euro but rose versus the British pound and Japanese yen.
Company Earnings Reports
OmniVision Technologies (OVTI)
At least three brokerages raised their price targets on OmniVision Technologies (OVTI) on Friday, a day after the image sensor maker reported better-than-expected first-quarter profit and projected a strong second quarter.
"Omnivision's July quarter revenues were a bit below the mark, but their overall financial performance in terms of gross margins and profitability was stellar. And the October guidance was even better," Oppenheimer analyst Yair Reiner said in an email.
"But this is a market that is tending, at least at first blush, to accentuate the negative," Reiner added, referring to the stock's 8-percent fall in Thursday after-market trade.
Oppenheimer raised OmniVision price target to $27 from $23, citing increasing gross margins.
The company, which supplies camera sensors used in devices like Apple's (AAPL) iPhone and Reasearch in Motion's (RIMM) BlackBerry Storm, had first-quarter gross margins of 26.9 percent compared with 24.9 percent a year ago.
Robert W. Baird and Wedbush Securities also raised their price targets on the stock to $28 from $25.
OmniVision competes with OEMs such as Kodak (EK.N), Micron (MU.O), Samsung (005930.KS), Sharp (6753.T), Sony (6758.T) and STMicroelectronics (STM.PA), but holds market leadership in complementary metal oxide semiconductor (CMOS) image sensor production.
Some analysts said OmniVision sensors could be used in the next generation iPod Touch scheduled to be launched in September. "I think there is a good chance they could be in the video Apple iPod Touch. I would be buyers on weakness (in price)," Needham and Co analyst Rajvindra Gill said in an email.
Shares of the company, which have risen 89 percent since touching a year low of $11.70 in November, were trading flat early Friday morning on Nasdaq. The broader Nasdaq Composite Index .IXIC was up 0.5 percent.
J. Crew (JCG)
Retailer J. Crew (JCG) fell 7.2% after its fiscal second-quarter profit surged 88% as sales of full-priced items and tight inventory control helped improve margins, but the company issued a weak outlook for the current quarter and trimmed its full-year guidance.
Company News and Movements:
• Intel Corp (NASDAQ:INTC) shares fell 1.1% to $17.97 on Friday after the chipmaker lowered its third-quarter revenue outlook to $11 billion, plus or minus $200 million, versus its prior view of $11.2 billion to $12 billion.
Shares, which were halted for 15 minutes Friday, gained more than 1% after they resumed trading.
"Intel coming out revising its revenue to the lower end of its range only further exacerbates the fears that the economy's growth is stalling," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
"Even though the news is bad, the bad news is already in the valuation. Obviously business isn't going great there, but the stock is so cheap this doesn't matter," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
• The bidding war for 3PAR (PAR) continued Friday, as Dell (DELL) increased its offer for the storage company to match HP's (HPQ) bid made Thursday, at $27 per share. 3PAR accepted Dell's offer, but HP upped its bid again early Friday, topping Dell's latest offer.
Shares of 3PAR jumped 25%, while Dell's stock rose 1%. Shares of HP edged down less than 1%.
After the close last night, Novell (NOVL) announced that its fiscal third-quarter profit dropped 5.9% on lower revenue and margins. Earnings rolled in at $15.7 million, or 4 cents a share, down from $16.7 million, or 5 cents a share, in the same period a year earlier. Excluding write-downs and other impacts, earnings fell to 6 cents per share from 7 cents per share, below analysts' average estimate of 7 cents per share. Revenue declined 7.9% to $199 million, the high end of the company's lowered August projection. Gross margin narrowed to 78.1% from 78.3% while operating expenses fell 9%. Maintenance and subscriptions revenue, which makes up the bulk of the company's total, slid 6.9%. Revenue from software licenses was down 7.6%, while services revenue decreased 15%.
The shares of NOVL are down slightly this morning following the news, eating into their year-to-date gain of more than 35%. The stock has recently slipped below the support of its 10-week and 20-week moving averages, but remains locked between support at the 5.60 level and resistance in the 6.20 region.
Heading into the earnings report, options players favored calls on the International Securities Exchange (ISE). During the past 10 trading sessions, 93 calls have been purchased to open for every one put purchased to open. This ratio of calls to puts is higher than 74% of all those taken during the past 12 months.
First Solar, Inc. (FSLR)
According to Barron's, analysts at Auriga USA said First Solar, Inc. (FSLR) is "best positioned" to capitalize on California's proposed decision to adopt a renewable auction mechanism (RAM), thanks to its "captive module supply" and the acquisitions of such firms as Turner Renewable Energy, Optisolar, and NextLight.
The brokerage firm also reiterated its "buy" rating on FSLR, echoing the already bullish sentiment levied toward the stock. According to Zacks, the stock has earned 19 "buy" or better endorsements, compared to 10 lukewarm "holds" and only five "sell" or worse ratings.
At midday, the shares of FSLR have followed the broader equities market higher, adding 1.9% to flirt with the $128.70 level at last check. From a sentiment standpoint, it appears short-term options speculators are also betting on more upside for the security, as its put/call open interest ratio (SOIR) of 0.95 stands only three percentage points shy of an annual optimistic acme.
In the newly christened front-month series of options, the September 150 strike is most popular among call traders, with more than 7,350 calls outstanding. Meanwhile, the out-of-the-money 140 and 145 strikes have also garnered notable attention, harboring roughly 6,500 and 5,900 open calls, respectively.
The following companies had some impressive options movements:-
Discover Financial Services (DFS)
Put players charged Discover Financial Services (DFS) on Thursday, with 2,855 of these bearish bets crossing the tape -- seven times the credit card concern's expected single-session put volume of just 363 contracts.
The star of the show was the September 14 put, with 1,705 contracts traded. The bulk of these puts traded at the ask price, indicating that they were likely purchased. Meanwhile, open interest ballooned by 1,679 contracts overnight, confirming that fresh bearish positions were added at this at-the-money strike. By buying to open the September 14 put, traders are counting on DFS to slip beneath $14 over the next few weeks. The stock is currently hovering around $14.39.
Option players have been growing more skeptical toward DFS lately, as indicated by the stock's put/call open interest ratio (SOIR) of 0.81, in the 58th annual percentile. Just two weeks ago, DFS' SOIR stood at 0.48, in the 13th annual percentile.
DFS is currently in the midst of a short-term downtrend, with the stock ushered lower by its 10-day moving average since Aug. 8. The shares also face additional resistance by their 10-week and 20-week trendlines, both of which are located around the $14.50 level. Furthermore, peak call open interest for the September series can be found at the 15 strike. Going forward, these multiple layers of resistance could keep DFS in check.
Burger King Holdings, Inc. (BKC)
Restaurant royalty Burger King Holdings, Inc. (BKC) has had quite a week. After reporting mixed results in its earnings report on Tuesday, the stock defied odds and actually surged ahead on the charts. This positive momentum has put BKC in place to close the week above its 10-week trendline, located at $17, for the first time since April 30.
Option players have taken an interest in the burger behemoth this week. Roughly 23,000 contracts changed hands on the session -- five times BKC's usual daily option volume. Calls made up the majority of the day's volume, with some 20,000 of these bullish bets traded.
Thursday's attention to calls is in line with recent trends. In the past two weeks, speculators on the International Securities Exchange (ISE) have bought to open over 16 calls for every put purchased. This ratio ranks above 70% of all other readings taken during the past year, pointing to an increased appetite for BKC call options lately.
Similarly, the stock sports a put/call open interest ratio (SOIR) of 0.33, revealing that call open interest triples put open interest among options set to expire in the front three months. This ratio ranks in the 20th annual percentile, indicating that short-term traders have been more optimistically aligned toward the shares just 20% of the time during the past year.
Turning to Thursday's activity, the September 20 call was by far most popular, with 6,907 contracts traded -- 86% of which changed hands at the ask price, indicating they were likely purchased. Open interest jumped by 5,688 contracts overnight, confirming buy-to-open activity at this out-of-the-money strike.
Meanwhile, 1,328 contracts traded on the September 16 put -- the majority of which also crossed the tape at the ask price. Open interest swelled by over 600 contracts overnight, indicating that fresh bearish positions were added here. By buying to open the September 16 put, traders are counting on BKC to slip beneath the $16 level over the next month.
For the front-month series, the September 20 call carries more open interest than any other strike -- call or put -- with a respectable 11,565 contracts open. Conversely, peak put open interest of just over 8,000 contracts can be found at the September 16 strike. Going forward, these heavy accumulations of open interest could confine the shares between support at $16 and resistance at $20.
Technically speaking, BKC has actually been stuck in a relatively tight trading range between $16.50 and $17.50 for the past several weeks. Up until this week, the upper rail of this range had been reinforced by BKC's descending 10-week moving average.
In fact, the stock's 10-week trendline had provided a springboard for the shares in the earlier part of 2010. Yet while BKC is in position to regain the support of this important trendline, the stock still faces several technical and options-related obstacles in the form of its 20-week moving average -- located around $18.50 -- and peak call open interest at the 20 strike.
The whopping resistance looming over BKC, along with the preponderance of optimism levied toward the shares, is a potentially dangerous combination. Should BKC's advances be rejected at one of many potential speed bumps, an unwinding of optimism from option traders could send the shares reeling.
Humana Inc. (HUM)
Humana Inc. (HUM) saw a surge in call volume on Thursday, with 2,084 contracts traded on the session -- more than double the insurance issue's usual daily call volume of around 1,000 contracts.
Calls have been all the rage on HUM lately, with the International Securities Exchange (ISE) reporting that 5.1 calls have been bought to open for every put during the past two weeks. This ratio ranks above 93% of all other readings taken during the last year, indicating that speculators on the ISE have seldom scooped up HUM calls at a faster rate.
The September 50 call was by far most popular, with 1,551 contracts traded at this strike -- 99% of which changed hands at the ask price, indicating they were likely bought. Open interest increased by 654 contracts overnight, confirming that fresh bullish positions were added at this strike. By buying to open the September 50 call, traders are expecting HUM to muscle above the $50 level over the next few weeks. For the record, HUM is currently trading around $48.56.
Technically speaking, HUM has been a bit range-bound lately. After peaking above $50 a few weeks ago, the stock pulled back to support at its 10-week trendline, located around $48. With peak call open interest at the 50 strike, HUM could find itself pinned between support at $48 and resistance at $50 in the near term.
**Bullish flow detected in Entergy (ETR), with 5281 calls trading, or 23x the recent average daily call volume in the name.
**Bullish flow detected in Check Point Software Technologies (CHKP), with 4918 calls trading, or 5x the recent average daily call volume in the name.
**Bullish flow detected in National Semiconductor (NSM), with 6335 calls trading, or 8x the recent average daily call volume in the name.
**Increasing volume is also being seen in 3Par (PAR), Sandisk (SNDK), and Cypress Semiconductor (CY).
On Thursday, the major indexes were unable to hold early gains despite a better-than-expected report on initial jobless claims. Trading has been choppy this week as investors remain wary about the economic outlook, following two disappointing reports on the housing market.
Bernanke told central bankers at a conference in Jackson Hole, Wyoming the recovery has weakened more than expected but the U.S. central bank was ready to take further steps if needed to spur the recovery.
The Fed chairman downplayed concerns that the economy might slip back into recession, reassuring investors spooked by his recent comments the U.S. economy faced "unusual uncertainty."
"Bernanke struck the right tone to say, 'We know things have been weaker than expected, but we still think we're going to get through this,'" said Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors in St. Louis.
"There's a perception here that things are better off than perhaps the market had priced," said Todd Colvin, vice president of MF Global. "That doesn't mean we're coming out of this any faster."
Mr. Bernanke's remarks helped to assuage nervous investors after the Commerce Department cut its estimate for U.S. GDP growth that again confirmed economic growth slowed to a crawl. Meanwhile, another report indicated consumer confidence in August continued to remain weak.
The stock market started on a positive note after U.S. economic growth was revised down in the second quarter, but still the reading was better than expected. The debate over whether the economic recovery has hit a soft patch or is headed for a double-dip recession has plagued the market.
Although the data pointed to an even softer performance in the third quarter, investors were relieved that the reading was not as bad as feared.
"Coming into the day, expectations were it could be a miserable day. It didn't happen, so I have to think there was huge short-covering behind this rally," Marcouiller said.
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