Market Insights from Schaeffer's Market Blog, June 22, 2006

Strategic Insights -

Among the key takeaways from the June 22 edition of Schaeffer's Market Blog are the stocks DaimlerChrysler, General Motors, AMR, U.S. Airways, and Apple Computer. The blog, written by Schaeffer's financial analysts and traders, provides quick insights into the day's most notable market activity from an options perspective. The report highlights the strengths of airline stocks, particularly AMR and U.S. Airways, despite weak market conditions. Additionally, the blog notes that General Motors is one of the few stocks higher on the day, with a 3.4% gain to $27.09, and has been in a constructive uptrend for over 10 weeks. Options activity in Apple Computer is also noteworthy, with the largest front-month volume in the July 60 call and potential resistance exerted by calls.

Key Takeaways:

  • DaimlerChrysler plans to launch a discount program to clear out inventories, which could be a negative signal for the company.
  • General Motors is one of the few stocks higher on the day, gaining 3.4% to $27.09, and has been in a constructive uptrend for over 10 weeks.
  • AMR and U.S. Airways are bucking the weak market trend, with AMR up 0.23% and U.S. Airways up 0.84%.
  • Apple Computer options are trading briskly, with the largest front-month volume in the July 60 call, which could exert options-related resistance and impede an early recovery.
  • The Schaeffer's put/call open interest ratio (SOIR) ranks lower than 81% of readings taken during the past year, indicating a lack of short interest to prop up the price.
  • General Motors has performed well since the market peak in early May, gaining almost 17% since May 5 and outperforming the Dow Jones Industrial Average.

Statistics:

  • DaimlerChrysler's stock price was 0.35% down on the day.
  • The Dow Jones Industrial Average (DJIA) was down 76 points, and the S&P 500 Index (SPX) was down seven points.
  • The Oil Service HOLDRs Trust (OIH) was up 0.41% and the AMEX Airlines Index (XAL) was up 0.01% for the day.
  • Apple Computer options showed front-month volume of 8,887 contracts at the July 60 call (QAA GL).
  • The Schaeffer's SOIR rank was lower than 81% of readings taken during the past year.

Sources:

  • Schaeffer's Market Blog, June 22, 2006
  • The Wall Street Journal
  • Schaeffer's Research website (www.SchaeffersResearch.com)
  • Forbes
  • Barron's