Palo Alto Networks Inc (PANW) Stock Is Heading 8% Higher

PANW stock looks set to squeeze higher

Shares of cybersecurity company Palo Alto Networks Inc  (NYSE:PANW) are higher by over 18% over the past week of trading, following their latest quarterly earnings report on May 31. This latest rally comes after a steep one-day drop just three months ago on March 1. Through the lens of technical analysis and investor psychology, this bullish reversal rally over the past week looks to have further upside — about 8%, to be exact.

One of my former mentors at JP Morgan used to remind me almost daily that “we can learn a lot (about the markets) by just watching.” What he meant is that by the way a stock, bond or currency reacts to news often times tells us when meaningful and likely sustainable rallies or sell-offs are about to take hold that we can profit from.

The other thing this statement implies is that patience is key. From an intermediate-term trading perspective waiting for an initial meaningful move in an asset to take hold and then pouncing on a trade has, over time, a significantly higher profitability rate than getting into trades in anticipation of news.

When I last discussed shares of Palo Alto Networks on May 16 I offered that “the breakaway rally that has taken hold in the stock thus far in May could be the start of something more promising.” Specifically I said that buying some PANW stock around the $120ish area made sense if it was paired with a put to partially protect the long position.

I said that a next upside price target could be around $135, which is the level the stock ultimately gapped higher to following the May 31 earnings report. So far, so good.

Looking at the multiyear weekly chart we see that despite the sharp rally over the past week, PANW stock has merely moved back to the upper end of its multiyear consolidation wedge as marked by the black parallels. From a momentum perspective as represented by the MACD oscillator at the bottom of the chart, we see that much more upside may still be in the cards. To be clear, momentum alone is no catalyst to buy or sell a stock, but it does allow for some context.

On the daily chart we see that the down-gap in March followed by the up-gap on June 1 left a clear so-called “island reversal” behind. This reversal pattern is bullish by nature as it left the price action from March 2 to May 31 rejected and alone.
On this chart, we also see that there is an unfilled gap left above the current price, which I marked with the upper blue box and which fills around the $152 area. In other words, after possibly some more consolidation of last week’s rally, PANW stock could gravitate toward $152 as a next upside price target. A break and hold above $141 could set in motion a squeeze higher toward $152, while any bearish reversal should be respected as a stop-loss signal.

THE BEST STOCKS TO BUY BEFORE FED WEEK

Utilities and metals tend to fare well during the week of FOMC meetings

Once the dust clears from today's testimony of fired FBI Director James Comey, as well as the snap election in the U.K., Wall Street will once again zero in on the Fed. The Federal Open Market Committee (FOMC) is expected to raise interest rates at its June meeting next week, and stock traders will no doubt nitpick Fed Chair Janet Yellen's post-meeting press conference for clues to the next rate hike. Against this backdrop, we took a look at how the S&P 500 Index (SPX) tends to react during Fed weeks, and outlined the best stocks and exchange-traded funds (ETFs) to own -- and which ones have attractive options right now.
S&P Slightly Underperforms During Fed Weeks

Going back to 2015, the SPX has averaged a 0.10% gain during Fed meeting weeks, according to data from Schaeffer's Senior Quantitative Analyst Rocky White. Further, the S&P has ended Fed weeks higher 53% of the time. That's just slightly beneath the index's anytime weekly stats since 2015, with the SPX averaging a gain of 0.13%, with a positive rate of 55%.

25 Best Stocks to Own During Fed Weeks

Meanwhile, below are the 25 best stocks and ETFs to own during a Fed week, using historical data since 2015. Utilities stocks -- often seen as "defensive" stocks -- dominate the list, led by PPL Corp (NYSE:PPL). The shares of PPL boast the best win rate of any S&P member during Fed weeks, ending the week higher 84% of the time. Further, PPL stock has averaged an impressive gain of nearly 2% during these weeks -- the second-best on the list. The utility stock has been in rally mode since the U.S. presidential election, and notched a post-financial crisis high of $40.20 on Tuesday.

Utilities, Gold & Silver Top Best ETFs to Own Next Week

As to the best ETFs to own during the week of a Fed meeting, it's no surprise to find the Utilities Select Sector SPDR Fund (XLU) near the top of the list. Shares of XLU have ended the week higher 68% of the time, going back to 2015, with an average weekly return of 0.89%. However, metal-based ETFs tend to perform even better, likely because tangible assets are often seen as "safe haven" investments and inflationary hedges.

The VanEck Vectors Gold Miners ETF (GDX), in fact, has fared the best of any exchange-traded fund during Fed weeks, hands-down. GDX has ended the week positive 68% of the time since 2015, with a stellar average return of 2.53%. The shares have surged  nearly 11% since their early May lows, and are on pace to end atop their 10-month moving average for the first time since October.

What's more, GDX's short-term options are a relative bargain right now, for traders expecting another burst higher. The fund's Schaeffer's Volatility Index (SVI) of 32% is higher than just 22% of all other readings from the past year, suggesting GDX's near-term options are attractively priced, from a historical volatility perspective. Further, GDX's Schaeffer's Volatility Scorecard (SVS) of 82 indicates the fund has exceeded option buyers' volatility expectations during the past year.

Likewise, the SPDR Gold Trust (GLD) is also near the top of the list, with a win rate of 68% and an average Fed-week gain of 0.91%. But it's the iShares Silver Trust (SLV) that takes the cake, as far as win rate. The silver-based fund has ended Fed weeks higher 79% of the time since 2015 -- in a class of its own -- with an average gain of 1.31%. Further, wannabe short-term call buyers can scoop up SLV options at a discount, as the ETF's SVI of 19% is lower than 90% of all other readings from the past 12 months, and SLV sports an SVS of 97 -- a major selling point for premium buyers.

THE CONTRARIAN'S GUIDE TO TRADING MAGAZINE COVER STORIES

Stocks featured in cover stories could be ripe for contrarian action

The internet has changed the way investors consume stock market news. There is a surplus of investing information out there now, all jockeying for your attention. However, one thing that hasn't changed is the magazine cover story as a sentiment indicator. Today, we're going to discuss how a contrarian trader can profit off these cover stories.

Why Cover Stories Are Lagging Indicators

This piece is not meant to deride news publications for poor content. The purpose of cover stories are, quite simply, to report the news. They want to attract your attention. Their priority isn't to gauge what a stock will do in the coming months; their priority is to report on what is newsworthy at the time.

As a result, when you read a cover story in The Wall Street Journal or Forbes, that trend is likely already widely known, universally accepted, and has been in place for a relatively long time. This is especially the case when a general interest news outlet, such as Time, touts the bullish or bearish case for a particular stock.

Given the rapid flow of information through the market, contrasted with the sluggish nature of print publications, we've found that cover stories -- both bullish and bearish -- most often coincide with the culmination of a trend, rather than its inception. By the time a positive or negative outlook for a given stock, commodity, or asset class is a topic of broad enough interest to command real estate on a magazine cover, it's more likely than not that traders have already priced in the same information discussed in the cover story.

Examining the Sentiment Cycle of Bull and Bear Markets

Let's consider how this fits into the "sentiment cycle" sequence. The sentiment sequence off a major bottom (whether for a single stock, or the broader market) can be described as: despair; disbelief; acceptance; and euphoria. Off a major top, the sequence goes: euphoria; disbelief; acceptance; and finally, despair.

The "despair" stage tends to mark a bottom. When "everyone" is bearish, selling pressure has been exhausted, and the next major move is likely to be higher.

Meanwhile, initial rallies off a market bottom -- as well as the initial declines off market tops -- are greeted with "disbelief." Eventually, the new direction for the market becomes sufficiently established and sentiment enters the "acceptance" stage. 

And then, of course, the next stop is "euphoria," which often marks a top, as buying power is nearly exhausted and the next major move is down.

"The Genius of Snapchat" Meets The Madness of Crowds

Snapchat (NYSE:SNAP) made the cover of TIME magazine in March 2017, ahead of its much-anticipated initial public offering (IPO). The cover story touted "The Genius of Snapchat." Soon after, Snapchat surged 44% during its first day of trading, with the stock opening at $24 after pricing at a higher-than-expected $17 per share. It reached its lifetime high the day after its IPO, hitting $29.44 on March 3. 

The stock has since declined, shedding 20% within the last month. At last check, SNAP was down 4% today to trade at $18.73, flirting with its all-time low of $17.59 on May 11. 

Any trader who took the bullish TIME cover as a tip to buy SNAP stock would have been sorely disappointed. The story wasn't an investigation into an as-yet unknown start-up; instead, it was a reflection of the bullish hype and high expectations surrounding the imminent Tech 2.0 IPO. Judging by the charts, the general euphoria reflected by that Snapchat TIME cover peaked almost immediately after the shares started trading -- making that upbeat cover story a solid shorting signal.

How to Use Magazine Covers In Your Trading

Properly gauging cover stories is just one component of contrarian trading, but it is a shrewd way to gain a leg up. Cover stories of major publications should serve as a smoking gun. It is a signal of the collective mood on Wall Street, and an indicator of what the "conventional wisdom" is saying about a given stock. 


That said, the cover story indicator is not an actionable contrarian buy or sell signal in and of itself. As part of each trader's usual due diligence, a thorough review of the fundamental, technical, and sentiment backdrop for each stock should be completed before any new positions are initiated.

JWN, NLNK, HYGS STOCKS ON THE MOVE TODAY

The Nordstrom family has formed a group to explore taking the retailer private

The stock market is trading higher, as Wall Street digests former FBI Director James Comey's congressional testimony. There are a number of stocks making volatile moves, though, including high-end department store Nordstrom, Inc. (NYSE:JWN), cancer treatment specialist NewLink Genetics Corp (NASDAQ:NLNK), and hydrogen generation name Hydrogenics Corporation (USA) (NASDAQ:HYGS). Here's a quick look at what's moving shares of JWN, NLNK, and HYGS.

JWN Stock Soars on Reports the Retailer Could Go Private

Nordstrom stock is trading up 10.8% at $44.89, on reports the retailer is considering going private. Specifically, several members of the Nordstrom family who collectively own a roughly 31.2% stake of JWN have formed a group to explore this option. The pop comes at an ideal time for JWN stock, which was staring at a nearly 16% year-to-date deficit heading into today's trading to test its footing near the round $40 mark.

Today's surge has the shares nearly filling a mid-May earnings bear gap -- and short sellers could be caught off guard. More than 24% of JWN's float is sold short, or 5.4 times the average daily pace of trading.

NLNK Stock Sinks to New Low

NewLink Genetics stock has plunged 32.9% to trade at $7.13 -- the worst performer on the Nasdaq -- and earlier hit a five-year low of $7.07. The shares are reacting to news Genentech will return the rights to NLNK's immuno-oncology drug candidate, GDC-0919, though a research collaboration between the two companies will continue. Pouring salt on the proverbial wound is a downgrade to "neutral" from "outperform" from Baird, which slashed its price target (to $8 from $25) along with Jefferies (to $7 from $18).

As NLNK stock continues to move further away from its 52-week high of $25.17 from April 3, there's plenty of room for more analysts to lower their outlooks. In fact, not a single one of the five brokerages covering NewLink Genetics maintains a "sell" rating, while the average 12-month price target is docked at a lofty $24.60, as of last night's close.

HYGS Stock Hits New High on Fuel Cell Deal

Hydrogenics stock has surged 18.2% to trade at $8.30 -- fresh off an annual high of $9.25 -- after the company said it inked a roughly $50 million purchase and licensing deal with Blue-G New Energy Science and Technology Corp for 1,000 fuel cells. HYGS shares are now sitting on an 88.6% year-to-date gain, and options traders are showing unusual interest in the stock. Though volume is still light on an absolute basis -- just 327 contracts have traded -- it's running at three times what's typically seen at this point in the day.

YAHOO STOCK OPTIONS VOLUME EXPLODES AHEAD OF VERIZON VOTE

Yahoo shareholders have been using options to hedge against a sudden pullback

Options trading has been brisk on Yahoo! Inc. (NASDAQ:YHOO) in recent weeks, per data from Schaeffer's Senior Quantitative Analyst Rocky White. In fact, YHOO stock has seen some of the highest options volume over the last 10 sessions, with 323,399 calls and 337,712 puts traded. Echoing this, call open interest is docked in the elevated 87th annual percentile, with 452,339 contracts open, while the 424,505 puts that are currently open is at a 52-week peak.

This explosive options volume is continuing today, with 199,224 contracts traded so far -- eight times what's typically seen, and on track to settle in the 100th annual percentile. Puts have a slight edge over calls, with 101,544 of the former and 97,680 of the latter on the tape.

A bulk of today's activity has centered on the weekly 6/23 60-strike call and put, and June 60 call and put. Specifically, 119,735 contracts have collectively traded here, or 60% of the day's total options volume. This just mirrors the recent action seen in YHOO's options pits, with a combined 399,471 new positions initiated at these four strikes over the last two weeks.

Data from the previous 10 sessions suggests some of these calls and puts were used to initiate a collar as part of an options hedge, to guard a long stock position against a sudden near-term drop in YHOO. Today, with Yahoo shares soaring on tailwinds from Alibaba Group Holding Ltd (NYSE:BABA), a portion of of the intraday options activity appears to be indicative of YHOO shareholders rolling these collars up, considering opening activity has been detected at the June 70 call and put.

At last check, Yahoo stock was trading up 7.5% at $54.36, and earlier hit a 16-year high of $55.35. Boosting the shares is a positive reaction to BABA's revenue forecast, given YHOO's 15.5% stake in the e-commerce company. Yahoo shareholders are also expected to vote on Verizon's planned acquisition of its core internet business, with reports suggesting the combined company -- which will be called Oath -- will result in up to 1,000 job cuts at YHOO and AOL.

DOW JONES INDUSTRIAL AVERAGE CAUTIOUSLY HIGHER AMID COMEY TESTIMONY

The Nasdaq managed another record intraday high

The Dow Jones Industrial Average (DJIA) has traded on both sides of breakeven today, with all eyes on the testimony of fired FBI director James Comey. So far, Mr. Comey has stopped short of accusing President Donald Trump of obstructing justice, saying that's up to special counsel Robert Mueller to decide. However, Mr. Comey did confirm President Trump asked him to drop the investigation into former national security adviser Michael Flynn, saying, "Lordy, I hope there are tapes" of the conversations, alluding to a recent tweet from Trump. Elsewhere, traders also continue to consider this morning's European Central Bank (ECB) decision, and are keeping tabs on a general election in the U.K. Despite the choppy trade and political uncertainty, the Nasdaq Composite (COMP) managed to hit another record high, while the S&P 500 Index (SPX) was last seen fractionally higher.

Continue reading for more on today's market -- and don't miss:

Analyst: Nvidia stock could double.
The gold stock flashing a "buy" signal.
Plus, big VeriFone options volume ahead of earnings; Alibaba's big day; and the surgical device stock crashing.

Among the stocks with unusual options volume today is payment processor VeriFone Systems Inc (NYSE:PAY), as the company prepares to report earnings after the close today. At last check, PAY call options were trading at 17 times the expected pace, thanks huge action at the June 18, 19, and 20 calls. PAY stock has a history of big post-earnings moves, including a nearly 25% drop in the session after last June's report. VeriFone stock was last seen up 2.5% at $18.39.

One of the top performers on the New York Stock Exchange today is Chinese internet issue Alibaba Group Holding Ltd (NYSE:BABA), as a blowout revenue forecast pushes the shares up 10% to trade at $138.32. In fact, BABA stock earlier hit a record high of $142.85, and is now up 78% year-over-year.

Over on the Nasdaq, surgical robot maker Mazor Robotics Ltd - ADR (NASDAQ:MZOR) is underperforming, amid news authorities searched the company's offices in Israel. The shares were last seen 9.9% at $33.66, on pace for their lowest close since April 24. Still, MZOR stock remains up more than 100% over the past year.

ALL EYES ON FED AS JUNE RATE HIKE DECISION LOOMS

The FOMC meeting will have all of Wall Street's attention

All eyes will be on the Fed next week, as the Federal Open Market Committee's (FOMC) highly anticipated June meeting gets underway. While an interest rate hike is likely already priced into the stock market, traders will look to the Fed's forecast and comments from Fed Chair Janet Yellen for clues to the pace of future rate hikes. Kroger Co (NYSE:KR) will highlight the relatively quiet earnings front.

Below is a brief list of some key market events scheduled for the upcoming week. All earnings dates listed below are tentative and subject to change. Please check with each company's respective website for official reporting dates.

On Monday, June 12, the Treasury budget will be released. Dominion Diamond (DDC) will report earnings.

On Tuesday, June 13, traders can look forward to the start FOMC meeting, as well as the producer price index (PPI). H & R Block (HRB) will report earnings.

Wednesday, June 14, marks a busy day, with the highly anticipated Fed decision out at 2 p.m. ET. The central bank's announcement will be followed by a press conference with Fed Chair Janet Yellen. Otherwise, business inventories data, the consumer price index, May retail sales, and weekly crude inventories all released. Jabil (JBL) and Liberty Tax (TAX) will report earnings.

On Thursday, June 15, weekly jobless claims, the Empire State manufacturing survey, the Philadelphia Fed business outlook survey, import/export data, industrial production figures, the housing market index, and Treasury International Capital (TIC) data all will be released. The Fed will also release its balance sheet. Bob Evans Farms (BOBE), Finisar (FNSR), and Kroger (KR) report earnings.

To close out the week on quadruple-witching Friday, June 16, housing starts and early June consumer sentiment stats will be released. Dallas Fed President Rober Kaplan will speak. There are no notable earnings reports.

BEHIND THE BABA STOCK BREAKOUT TODAY; PLUS, VALEANT SURGES ON INOVA SALE

Meanwhile, URBN gets hammered on sales woes

U.S. stocks are mixed this morning, as markets brace for a potentially volatile day of trading. Among specific names on the move today are Chinese internet issue Alibaba Group Holding Ltd (NYSE:BABA), drug stock Valeant Pharmaceuticals Intl Inc (NYSE:VRX), and retailer Urban Outfitters, Inc (NASDAQ:URBN). Here's a quick look at what's moving shares of BABA, VRX, and URBN.

Upbeat Forecast Has BABA Stock Buzzing

BABA stock is soaring, up 11% to trade at $139.72, and shattering its previous all-time high of $126.40 reached on May 17. The internet retailer raised eyebrows on Wall Street with its tremendously upbeat revenue forecast, projecting monster-sized growth of 45-49% in the 2018 fiscal year.

The stock is up 59% year-to-date, and has outperformed the S&P 500 Index (SPX) by more than 17 percentage points in the last three months. Analysts are feeling the love, as well; all 17 brokerage firms tracking the stock rate BABA a "buy" or better, with 14 of those maintaining "strong buys."

iNova Sale Helps Lift Valeant Stock

VRX stock is up 8% to trade at $13.18 today, after the company agreed to sell its iNova Pharmaceutical business for $930 million. The stock has been on the upswing since touching an eight-year low of $8.31 on April 24, and is testing support at its 80-day moving average. Despite this recent upturn, VRX stock is down 9.2% year-to-date.

The iNova sale may be welcome news for bullish options buyers, however. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), VRX has a 10-day call/put volume ratio of 2.81, which ranks in the 77th annual percentile.

SEC Filing Digs Into URBN Stock

URBN stock is down 9% to trade at $16.57 today, after the company's 10-Q filing revealed that second-quarter comparable sales are negative in the high single-digit range. Now, Urban Outfitters shares are trading at their lowest level since April 2009.

The retail stock has been in steady decline since peaking above $40 last November, with resistance at its 50-day moving average contributing to a year-to-date loss of roughly 42%. More than 19% of URBN's float is currently sold short, with quite a few bears targeting the stock -- yet analysts remain on the fence. Among 24 brokerage firms following URBN, 16 rate the equity a middling "hold."

THIS GOLD STOCK COULD BREAK OUT

CDE stock could be flashing "buy," if recent history repeats

The shares of gold and silver producer Coeur Mining Inc (NYSE:CDE) have been on a tear since their March lows, and if past is prologue, CDE stock could be headed even higher over the next month. Below, we'll take a look at Coeur Mining stock's recent performance on the charts, and discuss why near-term options buyers may want to take note of CDE shares.

Since hitting an annual low of $7.30 on March 14, CDE has skyrocketed 33% to trade around $9.70. The shares recently came within one standard deviation of their 40-day moving average, after a lengthy time above it -- what has been a "buy" signal in the recent past. According to Schaeffer's Senior Quantitative Analyst Rocky White, one month after Coeur stock's last two tests of this trendline, the shares were higher both times, with an average gain of 24.07%. Another rally of that magnitude would place CDE stock well north of recent round-number resistance at the $10 level, and in territory not charted since early 2017, before a massive post-earnings slide.

As alluded to earlier, those looking for another surge for CDE stock can pick up short-term options at a bargain. The security's Schaeffer's Volatility Index (SVI) of 49% is higher than just 10% of all other readings from the past year, suggesting Coeur Mining's near-term options are attractively priced, from a historical volatility standpoint. What's more, CDE shares boast a Schaeffer's Volatility Scorecard (SVS) of 91, indicating the stock has exceeded option players' volatility expectations during the past year.

JUNO, TLRD, LEA STOCKS DOWNGRADED TODAY

Tailored Brands stock is sinking after earnings

Analysts are weighing in on biotech stock Juno Therapeutics (NASDAQ:JUNO), apparel retailer Tailored Brands Inc (NYSE:TLRD), and automotive supplier Lear Corporation (NYSE:LEA). Here's a quick roundup of today's bearish brokerage notes on shares of JUNO, TLRD, and LEA.

JUNO Stock Cut to "Sell"

BTIG downgraded Juno Therapeutics stock to "sell" from "neutral," sending JUNO shares down 4.8% to trade at $22.58. Still, the shares remain in their channel of higher lows from late 2016, boasting a year-to-date lead of 19%. At the same time, JUNO stock may need to pick up the pace to avoid additional price-target cuts, since its average 12-month price target stands up at $29.50. On the fundamental front, Juno Therapeutics will present at Goldman Sachs' healthcare conference on Tuesday, June 13.

TLRD Stock Dips After Earnings

Tailored Brands reported weaker-than-expected first-quarter earnings, prompting analysts at Deutsche Bank to cut their price target by 33% to $14. In addition, Jefferies trimmed its price target by $2 to $12. The shares have dropped 2.9% to trade at $10.89, as they continue to underperform, though the move pales in comparison to what TLRD options traders were expecting. Tailored Brands stock was trading near $29 back in December; interestingly, it appears a number of short sellers cashed out too soon. During the last reporting period, short interest on TLRD stock declined by 12.2%.

LEA Stock Sinks After Downgrade

Lear Corporation stock is down 2.3% at $149.41, after Morgan Stanley downgraded the shares to "underweight" from "equal weight," and slashed its price target to $134 from $149. LEA stock's uptrend is still in place, however, as it's added almost 27% in the past 12 months, hitting a record high of $153.28 on June 2. Short-term options traders are seemingly well positioned for today's pullback. This is according to Lear's Schaeffer's put/call open interest ratio (SOIR) of 1.14, which ranks in the 83rd annual percentile. This means short-term options traders are more put-skewed than normal.

NVDA, EBAY, PYPL STOCKS UPGRADED TODAY

Citigroup thinks NVDA stock could hit $300

Analysts are weighing in on semiconductor stock NVIDIA Corporation (NASDAQ:NVDA), auction site eBay Inc (NASDAQ:EBAY), and digital payments platform Paypal Holdings Inc (NASDAQ:PYPL). Here's a quick roundup of today's bullish brokerage notes on shares of NVDA, EBAY, and PYPL.

Citigroup Says NVDA Stock Can Hit $300

Citigroup raised its price target on Nvidia stock to $180 from $145, while adding there's a bull case for a move to $300. NVDA shares closed yesterday at $149.12, after hitting a record high of $149.88, bringing its 52-week gain to 215%. The stock appears set to nab a new all-time peak out of the gate, up 3.3% in electronic trading. Amazingly, there are still plenty of bearish analysts, with 12 brokerage firms rating NVDA stock a "hold" or "strong sell." Plus, the shares have blown past their average 12-month price target of $126.20.

EBAY Stock Looks to Extend Run Higher After Bull Note

Citigroup also weighed in on eBay stock, upping its price target to $41 from $36. The shares hit a record high of $36.02 on Monday, and closed yesterday at $35.77, up 20.5% in 2017. EBAY shares are trading 1% higher ahead of the bell. In the meantime, options traders have been buying EBAY call options relative to put options at a faster-than-usual clip. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 50-day call/put volume ratio of 2.81, which ranks in the 78th annual percentile.

Analysts Eye Upside for PYPL Stock

eBay spin-off PayPal is also in the good graces of analysts this morning, with Credit Suisse and Berenberg raising their respective price targets to $56 and $57. PYPL stock closed Wednesday at $53.85, after hitting a record high of $54.07 on Monday. The shares have gained 36.4% year-to-date -- and are up another 0.3% in pre-market trading -- yet short sellers keep targeting them. Short interest rose by almost 15% over the past two reporting periods, and now almost a week's worth of potential buying power is sold short. PayPal stock could get a boost on the charts, then, if these bears begin to cover their losing positions.

DOW JONES INDUSTRIAL AVERAGE FUTURES DOWN AHEAD OF POTENTIALLY VOLATILE TRADING

Several high-profile geopolitical events are on tap today, which could spark big moves in the stock market

Dow Jones Industrial Average (DJIA) futures are trading modestly below fair value ahead of a potentially volatile session for stocks. The caution comes with "Super Thursday" events already underway overseas, including a press conference from European Central Bank (ECB) President Mario Draghi and a general election in the U.K. Earlier, the ECB left its interest rate unchanged, but removed its reference to future rate cuts, and indicated it is leaving the door open for more quantitative easing (QE), if needed.

Meanwhile, former FBI Director James Comey is scheduled to testify in front of the Senate Intelligence Committee beginning at 10 a.m. ET. This follows yesterday's release of Comey's written testimony, as well as President Donald Trump's nomination of Christopher Wray to head the FBI.

Continue reading for more on today's market, including:

Time to buy options on these 2 red-hot chip stocks.
Breaking down Shotspotter stock's big trading debut.
The Dow stock BMO says is "near peak valuation."
Plus, Alibaba stock signals new high after sales forecast; a big sale for Valeant; and two streaming music giants shift gears.

5 Things You Need to Know Today
 
The Chicago Board Options Exchange (CBOE) saw 832,055 call contracts traded on Wednesday, compared to 482,770 put contracts. The single-session equity put/call ratio edged down to 0.58, and the 21-day moving average remained at 0.61.
At its annual investor day, Alibaba Group Holding Ltd (NYSE:BABA) said it expects revenue to grow 45-49% in fiscal 2018, much higher than the expected rate of 36%. Despite a price-target cut at Deutsche Bank, BABA stock is up 13% in pre-market trading, with the e-commerce company on track to open at a record high.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) said it is selling its iNova Pharmaceuticals unit in an all-cash deal valued at $930 million, just days after reports it is looking to put its Bausch & Lomb eye-surgery business on the auction block. VRX stock is trading 3% higher ahead of the bell.
Pandora Media Inc (NYSE:P) and Sirius XM Holdings Inc. (NASDAQ:SIRI) have reportedly ended takeover talks on price disagreements, though sources are suggesting SIRI is looking to invest in P. While Pandora shares are 2.6% higher in pre-market trading, Sirius stock is down 0.4%.
The Fed's balance sheet will be released after tonight's close. J M Smucker (SJM) and Verifone (PAY) will report earnings.

Overseas Trading

Asian stocks for the most part managed modest gains ahead of today's busy schedule in the U.S. and Europe, though Japan's Nikkei underperformed. Specifically, the index gave up early gains, closing down 0.4%, after first-quarter gross domestic product (GDP) data came in softer than anticipated. Economic data was better out of China, where traders digested stronger-than-expected import and export numbers. As such, the Shanghai Composite and Hong Kong's Hang Seng both added 0.3%. In South Korea, the Kospi managed a 0.2% win, even after its neighbor North Korea reportedly launched cruise missiles during the morning hours.

European stock indexes are also testing positive territory. Investors are considering this morning's ECB decision to leave interest rates unchanged, though it removed a reference to the possibility of "lower" rates in its policy statement. The attention will now shift to Draghi's press conference. However, the FTSE 100 was last seen down 0.2%, amid today's parliamentary election. Germany's DAX and France's CAC 40 are both higher, though, sporting respective gains of 0.3% and 0.1%.

THIS RETAIL STOCK COULD SWING BIG AFTER EARNINGS

Tailored Brands will unveil its quarterly results after tonight's close

Men's Wearhouse parent Tailored Brands Inc (NYSE:TLRD) will report earnings after tonight's close. TLRD stock has a history of volatile post-earnings moves, too, with the shares plunging 32.2% the day after reporting in March, and surging 39.7% in December. On average, Tailored Brands shares have swung 23.6% in the session subsequent to reporting over the last five quarters, regardless of direction. This time around, the options market is pricing in a bigger 28.4% swing, based on current implied volatility calculations.

Despite a pretty rough quarter for retail earnings -- with Duluth Holdings the latest in a long line of victims -- TLRD options traders have been buying to open calls over puts at a faster-than-usual clip in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 3.53 ranks in the 76th annual percentile.

The near-the-money June 11 call has seen the biggest rise in open interest over this time frame, with more than 12,300 positions added. Data from the major options exchanges confirms a notable amount of these calls were bought to open. In other words, speculative traders are betting on TLRD stock breaking out above $11 by next Friday's close, when the front-month options expire.
It's certainly possible that short sellers have been using these long calls to hedge their bearish bets on any upside risk. Nearly 13 million TLRD shares are sold short, just below the eight-year peak of 14.4 million shares hit in the May 1 reporting period. At Tailored Brands stock's average daily volume, it would take about eight sessions to buy back these bearish bets.

Regardless, with earnings on the immediate horizon, elevated volatility expectations are being priced into Tailored Brands's near-term options -- making it more expensive to buy premium. While TLRD's Schaeffer's Volatility Index (SVI) of 158% ranks in the 74th percentile of its annual range, its 30-day at-the-money implied volatility of 132.2% is at a 52-week peak.

Technically, Tailored Brands shares have been charting a path lower since they topped out at an annual high of $28.76 in late December, and bottomed at an eight-year low of $9.91 on May 24. Today, TLRD stock is trading up 3.7% at $11, but is running out of steam near its 20-day moving average.

DOW JONES INDUSTRIAL AVERAGE CLINGS TO GAINS DESPITE OIL SELL-OFF

U.S. stocks are pushing higher despite lingering uncertainty

The Dow Jones Industrial Average (DJIA) is clinging to positive territory, as stocks try to gain despite the lingering uncertainty on Wall Street. Traders continue to monitor the latest developments out of Washington, D.C., where intelligence chiefs are testifying before the Senate, while digesting a huge drop in oil prices. Specifically, July-dated crude futures were down 4.1% at $46.22 per barrel, after domestic crude stockpiles unexpectedly rose last week. Gasoline inventories were also much higher than analysts were anticipating. Despite the seemingly bearish backdrop, and ahead of a few potentially market-moving events tomorrow, the Nasdaq Composite (COMP) and S&P 500 Index (SPX) are holding higher, with all three indexes set to snap two-session losing streaks.

Continue reading for more on today's market -- and don't miss:

The semiconductor stock crashing after earnings.
This Elon Musk tease is pushing Tesla stock to new highs.
Plus, the financial stock up 600% in June; Coca-Cola options active; and Exact Sciences' setback.

Among the stocks with unusual options volume today is The Coca-Cola Co (NYSE:KO), as the blue chip pulls back after a downgrade to "market perform" from "outperform" at BMO Capital. With the shares down 1.2% at $45.43, puts are crossing at three times the expected pace, thanks to heavy action at the July 44 put. Specifically, it looks like one options trader sold to open 5,000 contracts here, betting on short-term technical floor for Coca-Cola shares. Even though analysts have long been bearish on KO stock -- 10 of 12 say "hold" -- the shares hit an annual high of $46.06 yesterday. 

One of the top Nasdaq performers today is Wins Finance Holdings Inc (NASDAQ:WINS), as the financial stock continues to trade wildly. After being halted earlier, WINS shares are up 79.6% at $145.50, meaning they've now added over 600% since in June. The stock has been unbelievably volatile all year, sporting a 52-week low of $10.34 and a high of $465 for the same period. There's no clear reason for the price action. 

At the other end of the Nasdaq is EXACT Sciences Corporation (NASDAQ:EXAS), after the company announced a public stock offering for $35 a share -- a discount to yesterday's close at $36.59. The molecular diagnostics stock came under pressure a few weeks back, too, after Citron Research weighed in bearishly. Even though EXAS stock was last seen 6.6% lower at $34.17, its year-to-date gain clocks in at almost 156%.

KO, PEP, DPS STOCKS REACT TO BMO BLAST

Dr Pepper Snapple shares are at an "attractive entry point"

BMO chimed in on a number of high-profile drink stocks today. The brokerage firm downgraded The Coca-Cola Co (NYSE:KO) to "market perform" with $46 price target, saying the Dow stock is "near peak valuation." PepsiCo, Inc. (NYSE:PEP) also saw its rating lowered to "market perform" and its price target to $120 on valuation concerns. Dr Pepper Snapple Group Inc. (NYSE:DPS), meanwhile, was upgraded to "outperform" and its price target was raised to $105, with the brokerage firm noting the stock's "attractive entry point." Here's a closer look at how shares of KO, PEP, and DPS are reacting to the analyst attention.
KO Stock Trading at the Bottom of the Dow

Coca-Cola stock was last seen trading down 1% at $45.53, one of the top decliners on the Dow. Longer term, though, KO shares have surged more than 13% since hitting a year-to-date low of $40.22 in mid-February, and notched an annual high of $46.06 yesterday.

And while most analysts remain on the sidelines with a tepid "hold" recommendation, one KO option trader today is betting on Coca-Cola to hold above $44 over the next seven weeks -- home to the stock's 40-day moving average and late-July bear gap highs. Specifically, Trade-Alert indicates a block of 5,000 July 44 puts was sold to open earlier for an initial net credit of $120,000 (number of contracts * $0.24 premium collected * 100 shares per contract).

PEP Options Traders Bet On Higher Highs

PEP is trading 0.4% lower at $117.21, at risk of closing south of its 10-day moving average for the first time since May 9. However, Pepsi shares have put in a strong overall performance in 2017, up 12%. Plus, several convincing bounces off its rising 40-day moving average in late April and early May helped send PEP stock to a record high of $118.12 on May 30.

PEP options traders have been targeting even higher highs in recent weeks. The stock's September 125 call has seen the biggest rise in open interest over this time frame, with 21,802 contracts added. Data from the major options exchanges confirms buy-to-open activity, meaning they expect Pepsi shares to be trading north of $125 by September options expiration.
DPS stock Stuck in Tight Trading Range

Dr Pepper Snapple stock is up 0.6% at $92.81, but still has yet to fill its late-April earnings bear gap. While the shares are maintaining a 2.5% year-to-date lead, they have more recently been stuck trading between their 30-day and 40-day moving averages.

While DPS options volume is relatively light -- open interest is composed of just 6,036 contracts, in the 22nd annual percentile -- sentiment on other parts of Wall Street is noticeably skewed toward the skeptical side. Short interest, for instance, jumped 10.6% in the most recent reporting period, while nearly three-quarters of covering analysts maintain a "hold" or "sell" rating, as of last night's close.

NAV, TSLA, CALA STOCKS IN THE NEWS TODAY

The FDA's fast track decision has Calithera in the news

U.S. stocks are cautiously higher today, after two straight down days. Among specific names on the move today are truck manufacturer Navistar International Corp (NYSE:NAV), Elon Musk's Tesla Inc (NASDAQ:TSLA), and pharmaceutical company Calithera Biosciences Inc (NASDAQ:CALA). Here's a quick look at what's moving shares of NAV, TSLA, and CALA.

Lower Sales Cut Into Navistar Stock

Navistar is down 0.5% at $30.20 today, after posting a quarterly loss and confessing to its ninth consecutive quarter of declining revenue. Even with today's dip, the stock's performance year-over-year has been astounding -- NAV has roughly doubled in value over this time frame.

Despite the equity's recent rally, traders still seem bearish. Short interest accounts for 14.3% of the stock's float, or nearly 15 times NAV's average daily trading volume.

Shareholders Meeting, Model Y Have Tesla Stock in Focus

Tesla stock is up 1% to trade at $357.26 today, after shareholders voted to continue the three-year terms for the board led by CEO Elon Musk, and as traders eye the first preview of the Model Y. Tesla stock shot to a record high of $359.59 yesterday, and has jumped by 67% year-to-date.

Analysts and investors alike still seem skeptical, however. Eleven out of 15 analysts maintain a "hold" or "sell" rating, and TSLA sports a Schaeffer's put/call open interest ratio (SOIR) of 1.42, with puts easily outnumbering calls among short-term options.

FDA Fast Track Designation Boosts Calithera Stock

Calithera stock is 10% higher today, trading at $16.98, after CB-839 -- its treatment for renal cell carcinoma -- received a fast track designation from the Food and Drug Administration (FDA). Today's pop continues a strong year for CALA stock, which is up 422% year-to-date. Earlier this morning, in fact, the stock hit a new two-year high of $17.50.

While Calithera options volume tends to be light on an absolute basis, the stock boasts a 10-day call/put volume ratio of 21.03. The options seem to be attractively priced as well, with CALA's Schaeffer's Volatility Index (SVI) of 108% stands higher than just 18% of all other readings from the past year, implying that near-term option traders are pricing in relatively low volatility expectations.

AMBA, DLTH, UNFI STOCKS DOWNGRADED TODAY

GoPro supplier Ambarella offered lackluster current-quarter guidance

Analysts are weighing in on GoPro supplier Ambarella Inc (NASDAQ:AMBA), apparel retailer Duluth Holdings Inc (NASDAQ:DLTH), and health foods stock United Natural Foods, Inc. (NASDAQ:UNFI). Here's a quick roundup of today's bearish brokerage notes on shares of AMBA, DLTH, and UNFI.

Weak Forecast Drops AMBA Stock

Ambarella stock is down 10.6% at $553.39, as the company's lackluster current-quarter forecast overshadows an earnings beat. Plus, Deutsche Bank lowered its price target by $1 to $54. It's been a choppy year on the charts for AMBA, with the shares marking a low of $46.32 exactly one year ago and a high of $74.95 on Oct. 3. Today's bear gap has AMBA back below its year-to-date breakeven mark of $54.13.

Options traders have continued to buy to open calls relative to puts at a near-annual-high pace, though. In fact, Ambarella's 50-day call/put volume ratio of 2.57 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 94% of other readings from the past year.

DLTH Stock Tumbles After Earnings

Duluth Holdings is the latest retail stock to take a hit, after Macy's gross margin warning sank department stores yesterday. DLTH is down 16.6% at $17.15 -- and earlier touched an annual low of $16.90 -- after the company's weaker-than-expected quarterly earnings sparked a price-target cut to $25 from $27 at Raymond James.The shares have fallen off sharply since peaking at $38.19 in November, and though the stock is short-sale restricted today, this is great news for short sellers. Specifically, these bears control 3.2 million DLTH shares, which equates to 20 times its average daily trading volume.

Sales Miss Weighs On UNFI Stock

United Natural Foods stock is down 1.9% at $40.12, after the company's quarterly sales fell short of forecasts. In response, Deutsche Bank dropped its price target to $43 from $46, while Pivotal Research lowered its target by $1 to $32. This puts UNFI dangerously close to its 52-week low of $38.52, set back in September, as it remains in the channel of lower highs and lows it's been in since the end of 2016. The vast majority of analysts are already bearish on United Natural Foods stock, with 90% rating it a "hold" or worse.

AAPL, KEYS, PLAY STOCKS UPGRADED TODAY

Apple is set to kick off Day 3 of its WWDC

Analysts are weighing in on tech giant Apple Inc. (NASDAQ:AAPL), electronics equipment manufacturer Keysight Technologies Inc (NYSE:KEYS), and entertainment stock Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY). Here's a quick roundup of today's bullish brokerage notes on shares of AAPL, KEYS, and PLAY.

Argus Raises Price Target for AAPL Stock

Apple stock is edging higher ahead of Day 3 of its Worldwide Developers Conference (WWDC), after Argus raised its price target to $175 (subscription required). Most analysts are already bullish on AAPL shares, with 23 of 30 covering brokerage firms rating them "strong buy" or "buy." However, Apple closed yesterday at $154.45, and its average 12-month price target comes in at $155.84, so it wouldn't be surprising to see more price-target increases come through. During the past three months, AAPL stock has outperformed the S&P 500 Index (SPX) by 8.4 percentage points, touching a record high of $156.65 on May 15.

KEYS Stock Ready to Unlock Record Highs

Keysight Technologies stock is set to continue its quest for record highs, rising 6.8% in pre-market trading, thanks to the company's strong fiscal second-quarter earnings results and upbeat current-quarter outlook. At least four price-target hikes have come through in response, with BofA-Merrill Lynch setting the highest bar at $53. KEYS stock settled at $40.25 yesterday, after touching a record best $40.75 intraday, up 27% year-over-year. The equity sees little action in the options pits, but some traders may have been speculating on such an upside move, since June calls accounted for four of the five largest increases in open interest during the past five days.

Bull Notes Come In on PLAY Stock After Earnings

Dave & Buster's stock is down 1.9% ahead of the open, even after the company topped Wall Street's estimates with its first-quarter results. Specifically, the company posted revenue of $304.1 million for the period, better than the consensus estimate of $299.8 million, while posting better-than-expected adjusted per-share earnings. However, PLAY shares rallied hard into the quarterly event, hitting a record high of $70.42 yesterday before closing at $70.17. As it stands now, the stock is up 24.6% year-to-date, and analysts expect more upside. Maxim was one of at least five brokerages to raise its price target, setting its mark at $78. Meanwhile, Dave & Buster's stock could stand to benefit from a short-squeeze situation, since 11% of its float is sold short.

DOW JONES INDUSTRIAL AVERAGE FUTURES RISE AS TRUMP SECURITY OFFICIALS FACE SENATE

Oil prices are trading lower ahead of the weekly domestic inventories update

Dow Jones Industrial Average (DJIA) futures are trading above fair value, following two straight down days for the blue-chip index. Traders have been waiting on the sidelines ahead of tomorrow's onslaught of global events that have the potential to spark stock market volatility. Today, though, several high-ranking members of President Donald Trump's national security team -- including acting FBI Director Andrew McCabe and Deputy Attorney General Rod Rosenstein -- are slated to testify in front of the Senate Intelligence Committee, against the backdrop of media reports suggesting Attorney General Jeff Sessions has been clashing with Trump. Meanwhile, July-dated crude futures are trading down 0.8% at $47.83 per barrel ahead of U.S. inventory data.

Continue reading for more on today's market, including:

Schaeffer's Senior Quantitative Analyst Rocky White investigates what this rare S&P streak could mean for stocks.
The takeover talk that sent this solar stock higher.
2 reasons Wedbush thinks Tractor Supply stock is at a prime entry point.
Plus, AMD stock surge set to continue; Tesla shareholders weigh in; and more store closings for Sears.

5 Things You Need to Know Today
 
The Chicago Board Options Exchange (CBOE) saw 842,134 call contracts traded on Tuesday, compared to 497,741 put contracts. The single-session equity put/call ratio jumped to 0.59, and the 21-day moving average dropped to 0.61.
Advanced Micro Devices, Inc. (NASDAQ:AMD) shares got a lift yesterday on news the company's chips would be used in Apple's iMac Pro, with demand for its graphics cards driven by bitcoin miners. After closing up 7% on Tuesday, AMD is 2.6% higher in electronic trading.
Tesla Inc (NASDAQ:TSLA) shareholders voted against declassifying the car maker's board of directors, a move proposed by the Connecticut Retirement Plans and Trust Funds to increase accountability. After hitting a record high on Tuesday, TSLA stock is trading up 0.7% ahead of the bell.
Sears Holdings Corp (NASDAQ:SHLD) said it will close 66 more Kmart and Sears stores, bringing its total number of closures to 180 so far this year. Despite a late-May earnings bull gap, SHLD stock is down 29% year-to-date, and is 1.7% lower in pre-market trading.
The regularly scheduled weekly crude inventories and consumer credit data will be released. ABM Industries (ABM), Cherokee (CHKE), and Tailored Brands (TLRD) will report earnings.

Overseas Trading

It was another mixed session for Asian stocks, as Thursday's docket of high-profile events -- including the parliamentary election in the U.K. and testimony from former FBI Director James Comey in the U.S. -- continue to hold global markets captive. China's Shanghai Composite still had a standout session, however, rising 1.2%. This came after a number of listed companies urged employees to buy stocks. Japan's Nikkei also closed above breakeven, edging up 0.2%, though a stronger yen capped stocks' upside. Meanwhile, Hong Kong's Hang Seng and South Korea's Kospi both closed lower, with respective losses of 0.1% and 0.4%.

Major stock indexes are also mixed in Europe, despite a big day from banks following news that Spain's Santander is buying Banco Popular. Of course, investors are also taking note of tomorrow's European Central Bank (ECB) meeting, with ECB President Mario Draghi and his fellow central bankers expected to temper their dovish tone. France's CAC 40 is leading the way so far, up 0.8% and snapping back from a two-day losing streak. Germany's DAX is also higher, up 0.1%, even after new factory orders for April disappointed. In London, the FTSE 100 is down 0.1%.

ANALYZING THE S&P'S UNUSUALLY POSITIVE START TO 2017

The SPX has stayed in positive year-to-date territory through the first week of June only 10 other times

Watching this market daily can be mind-numbing, as the S&P 500 Index (SPX) trudges higher little by little. I’m not complaining, though, if it’s profitable. In fact, at no point in 2017 has the index traded below its 2016 close. In the analysis below, I’ll take a deeper look into that stat, and then I’ll find years similar to 2017 to see how the SPX performed going forward.

What The 2017 Stock Market Has In Common With 1987

At its lowest point on the first trading day of 2017, the S&P 500 was 0.28% above its 2016 close. It hasn’t traded lower since, which means investors have remained in the black all year through the first week of June. Only 10 other years, which are listed in the table below, can make that boast.

During the current bull market, this has occurred twice. The market gained double-digit percentages in 2012 and 2013 through the rest of the year. After that, however, the most recent year was 1987, which is remembered for just one day -- Black Monday, on which the SPX fell 20%.

Using Year-to-Date Lows to Gauge Rest-of-Year Returns

Going back to 1929, I found the rest-of-year returns for the index depending on the low point through the first week of June. When the biggest year-to-date loss was less than 1%, like this year, the index usually did well going forward. Specifically, the S&P averaged a 7.41% gain until year end, with 80% of the returns being positive.

Stocks have done the worst when the loss is neither extremely low nor extremely high (between 1% and 10%). That middle column shows a rest-of-year average gain that is barely above breakeven, with 59% of the returns positive.

The returns through the rest of the year when the index reached a loss of 10% or more haven’t been too bad, averaging a gain of 5.83%. However, those returns have been extremely volatile, as reflected by the standard deviation numbers -- probably more so than most investors would like to stomach.

Similar Years to 2017 Show Bullish Tendencies

The chart below shows the year-to-date return so far for 2017, along with the five yearly returns that were most similar through the first week of June. The year that most resembles this year is 1964. You can see in the table below the chart -- which includes the 10 years that most resemble this one -- that the SPX went on to gain a respectable 7.25% for the rest of that year.

What Does This Mean for 2017 Stock Returns?

In this final table, I summarize the returns in the table above and compare them to other years. When the S&P 500 has behaved like it's doing in 2017, the index's returns have been bullish for the rest of the year, averaging a gain of 6.17% and positive 80% of the time. Compare that to other years, which averaged a gain of 3.66% and were positive 65% of the time. That said, the returns over the next three months in these years have been typical.

So, will the rest of the year live up to the bullish precedent of these similar years? They say the past cannot always be used to predict the future, but it’s still nice to have history on your side.

DOW JONES INDUSTRIAL AVERAGE DIPS; OIL SWINGS HIGHER

The Dow spent the entire session trading in negative territory

he Dow Jones Industrial Average (DJIA) spent the entire session in negative territory, as traders took a risk-off approach ahead of several potentially volatile events later this week. Ongoing turmoil in the Middle East also weighed on investor sentiment, though oil prices managed to erase earlier losses on expectations for a drop in domestic supplies. The S&P 500 Index (SPX) and Nasdaq Composite (COMP) also closed lower on a down day for U.S. stocks.

Continue reading for more on today's market, including:

2 penny stocks flashing "buy."
Breaking down the $2.9 million bearish bet on oil.
2 reasons AMD stock was at the top of the SPX today.
Plus, Delta Air Lines stock has room to run; Valeant's big day; and a new high for Netflix stock.
The Dow Jones Industrial Average (DJIA - 21,136.23) closed down 47.8 points, or 0.2%. Wal-Mart paced the 19 Dow decliners with its 1.7% loss, while Exxon Mobil's 1.4% gain led the 11 advancers.

The S&P 500 Index (SPX - 2,429.33) settled with a 6.8-point, or 0.3%, loss, while the Nasdaq Composite (COMP - 6,275.06) ended the session down 20.6 points, or 0.3%.

The CBOE Volatility Index (VIX - 10.45) climbed 0.4 point, or 3.8%, to notch its highest close since May 23.

5 Items on Our Radar Today:
The Labor Department's Job Openings and Labor Turnover Survey (JOLTS) showed U.S. job openings reached a record high in April, while hiring slowed -- pointing to a mismatch in skills, versus a slowing demand for labor. Nevertheless, the report points to a tightening labor market, which adds support behind a June rate hike at the Fed's policy-setting meeting next week. (Reuters)
Uber has reportedly fired 20 employees after a law firm hired by the car-service company looked into 215 complaints, including sexual harassment claims. (Los Angeles Times)
How bearish traders could help unlock even more gains for Delta Air Lines stock.
Valeant stock had call buyers betting on more upside.
Netflix hit a new record high, after Cantor Fitzgerald waxed optimistic on the FANG stock.

Commodities

Oil snapped its two-day losing streak today, on expectations tomorrow's crude inventories update will show a continued decline in domestic inventories. At the close, July-dated futures were up 79 cents, or 1.7%, at $48.19 per barrel.

Gold closed higher for a third straight session, as the dollar weakened and traders sought safety ahead of several market-moving events. August-dated gold futures rose $14.80, or 1.2%, to settle at $1,297.50 an ounce -- the highest close since Nov. 4.

M, PCAR, AMD STOCKS ON THE MOVE TODAY

Advanced Micro Devices is trading at the top of the S&P 500 Index

The stock market is still trading in negative territory, even as oil prices swing higher. Among specific stocks making big moves are retailer Macy's Inc (NYSE:M), heavy machinery maker PACCAR Inc (NASDAQ:PCAR), and Apple supplier Advanced Micro Devices, Inc. (NASDAQ:AMD). Here's a quick look at what's moving shares of M, PCAR, and AMD.

M Stock Sinks to New Low After Gross Margin Warning

Macy's stock is trading down 7.5% at $22.06 -- fresh off a six-year low of $22.03 -- after the retailer issued a gross margin warning at today's annual shareholder meeting. This is just more of the same for M shares, though, which have lost nearly two-fifths of their value in 2017. The stock could face even more pressure, should short sellers continue to increase their bearish exposure. Short interest edged up 3.3% in the most recent reporting period, but still accounts for a low 5% of Macy's available float.

PCAR Stock Upgraded at UBS

A bullish note from UBS has PACCAR shares trading 3.8% higher today at $64.68. The brokerage firm raised its rating on PCAR stock to "buy" from "neutral" and its price target to $75 fro $66 -- in record-high territory -- citing a healthy used truck market as a "leading indicator for new production."

PCAR shares have now broken free from recent congestion near their 200-day moving average, and are back in positive year-to-date territory. There's plenty of room for more analysts to upwardly revise their ratings, too, considering the majority maintain a "hold" or worse rating on PACCAR stock.

AMD Stock Gaps Higher on Apple, Bitcoin Demand

Advanced Micro Devices stock is trading up 7.7% at $12.11 -- at the top of the S&P 500 Index (SPX) -- after Apple at its Worldwide Developers Conference (WWDC) said the iMac Pro would be outfitted with AMD chips. Additionally, a recent surge in bitcoin has increased demand for AMD's graphics cards. Today's surge has AMD stock back above its year-to-date breakeven mark, and on track to close north of its 40-day moving average for the first time since May 1. Short sellers could be getting a little nervous, too. Short interest surged 20.9% in the most recent reporting period, and now accounts for 17.5% of AMD's available float.

2 PENNY STOCKS FOR YOUR TRADING PORTFOLIO

AUO and HLIT recently retook their 50-day moving averages

A couple of "penny stocks" created a blip on our trading radar this week. Specifically, LCD panel provider AU Optronics Corp (ADR) (NYSE:AUO) and video infrastructure concern Harmonic Inc (NASDAQ:HLIT) sent up potential "buy" signals on the charts. Below, we'll take a look at AUO stock and HLIT stock, both of which could benefit from a short squeeze.
AUO Stock Attempting to Fill Bear Gap

The shares of AU Optronics are up 2% at $4.00, attempting to fill an earnings bear gap from May 8. Since skimming the $3.63 level in mid-May, AUO stock has rallied more than 10%, and recently retook its 50-day moving average -- a solid "buy" signal for stocks in the recent past. However, the overhead $4.30-$4.40 region has acted as a ceiling for AU Optronics stock since mid-2016, and is roughly two times the security's early 2016 lows.

Analysts remain wary of AUO stock, with just one out of four offering up a "buy" or better rating. Should the shares continue their upward momentum, a round of upgrades or positive initiations could lure more buyers to the table. Meanwhile, short interest skyrocketed nearly 35% during the past two reporting periods, and would take more than two weeks to buy back, at AU Optronics stock's average daily trading volume.
HLIT Stock On the Rebound

Harmonic stock is down 0.9% to trade at $5.45 today. However, the shares yesterday retook their own 50-day moving average for the first time since an early May bear gap, when traders panned the company's steeper-than-expected per-share earnings loss and lackluster outlook. Since falling as low as $4.85 in mid-May, HLIT stock has rebounded roughly 13%, though rally attempts have stalled in the overhead $6 area since mid-2016. In fact, the $6 level is a roughly 61.8% Fibonacci retracement of Harmonic stock's decline from 2015-2016.

As with AUO, the shares of HLIT remain plagued by pessimism. Just 40% of covering analysts consider the equity worthy of a "buy" or better endorsement, and short interest represents nearly 14% of the stock's total available float. At Harmonic stock's average daily trading volume, it would take about 14 sessions to buy back these bearish bets. Should the recent retake of its 50-day moving average prove, in fact, to be a "buy" signal, a round of upbeat analyst attention or a short squeeze could add fuel to the equity's fire.

USO OPTIONS BEARS GROW BOLD AS OIL PRICES SINK

The energy sector has been spiraling alongside crude oil prices

Energy shares have been spiraling alongside crude oil prices, with Schaeffer's Senior V.P. of Research Todd Salamone suggesting investors avoid the "vulnerable" group in recent Monday Morning Outlook commentaries. The sector's struggles are highlighted in the recent price action of the United States Oil Fund (USO), whose shares have plunged more than 8% since being swiftly rejected by their 80-day moving average on May 24. Against this backdrop, one options bear lowered her expectations for USO, betting on the exchange-traded fund (ETF) to trade deeper into single-digit territory.

On Monday, roughly 95,000 puts traded on USO, compared to roughly 53,000 calls. Trade-Alert highlighted noteworthy action at the August 9.50 and 10 puts, where it seems one speculator sold to close the higher-strike options -- likely initiated in mid- and late-May when USO was trading north of $10 -- and bought to open the lower-strike puts. By rolling the option down, the trader is looking to maximize the profit potential on her bearish oil bet.

This skepticism among USO options traders has been growing in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 103,034 puts in the last 10 sessions, compared to 83,511 calls. Even more telling, the resultant put/call volume ratio of 1.23 is nearly double where it was two weeks ago.

And while put open interest is currently docked at a 52-week peak of 2 million contracts, there's a notable put-skew is notable among short-term USO options, too. The fund's Schaeffer's put/call open interest ratio (SOIR) of 1.44 ranks in the 76th annual percentile, meaning traders are more put-heavy than usual among options set to expire in three months or less.

Drilling down, the August 8.50 put is USO's top open interest position, with 241,845 contracts outstanding. Nearly all of the activity here transpired on May 26, when a block of 215,000 contracts was bought to open for $2.9 million (number of contracts * $0.135 premium paid * 100 shares per contract). This is also the most the put buyer stands to lose, should USO settle north of $8.50 at expiration at the close on Friday, Aug. 18, while profit will accumulate on a move below breakeven at $8.36 (strike less premium paid).

At last check, USO shares were up 0.3% at $9.83, even with July-dated crude futures trading down 0.3% at $47.27 per barrel. Earlier, the energy ETF was staring at a 0.7% loss to hit an intraday low of $9.73.

DOW JONES INDUSTRIAL AVERAGE STRUGGLES; TRADERS SEEK SAFETY IN GOLD

The Nasdaq briefly turned positive, but stocks are mostly lower at midday

The Dow Jones Industrial Average (DJIA) is off its early morning lows, but stocks are still struggling for upside as traders exercise caution ahead of some major market events. In the meantime, investors are digesting this morning's Job Openings and Labor Turnover Survey (JOLTS), which showed job openings in the U.S. increased to an all-time high of six million in April, while hiring decreased. Elsewhere, oil prices continue to slide amid oversupply concerns, with July-dated crude futures down 0.4% at $47.19 per barrel, though a weaker dollar and safe-haven demand have August-dated gold up 1.04% at $1,296.10 an ounce. While the Nasdaq Composite (COMP) briefly flirted with positive territory, both it and the S&P 500 Index (SPX) have joined the Dow in negative territory, with little inspiration to be found for stock buyers.

Continue reading for more on today's market -- and don't miss:

3 stocks at record highs after bullish analyst notes.
The report driving heavy call buying on Valeant stock.
Plus, AMD call volume pops; bluebird flies high again; and a soaring apparel stock.

Among the stocks with unusual options volume today is Advanced Micro Devices, Inc. (NASDAQ:AMD), as the shares rally following news Apple is using the company's Radeon Pro Vega GPU graphics processor in its new iMac Pro. AMD stock was last seen up 6.3% at $11.95, as it tries to take back its 50-day moving average, located at $12.21. In the meantime, AMD calls are trading at two times the expected pace for this point in the day. Two of the most popular options are the weekly 6/9 11.50- and 12-strike calls. Those buying to open the options expect AMD shares to top the strikes by the end of this week, when the contracts expire. Meanwhile, the June 12 call is also seeing heavy action.

One of the top Nasdaq performers today is gene therapy specialist bluebird bio Inc (NASDAQ:BLUE), as the biotech stock extends yesterday's big upside move. BLUE shares were last seen up 13.7% at $103.85, and earlier hit an annual high of $104.90, after BMO upgraded the stock to "outperform" from "market perform" and upped its price target to $108 from $83. Wedbush also weighed in, raising its price target to $100 from $95. Now, bluebird bio stock is up almost 38% in June.

Apparel stock G-III Apparel Group, Ltd. (NASDAQ:GIII) is also outperforming on the Nasdaq, up 21.7% at $24.21, thanks to a better-than-expected first-quarter earnings report. This puts GIII on pace to close above its 100-day moving average for the first time since late December, but the shares remain well below their 52-week high of $51.81 from last July.

BEARISH TRADERS COULD HOLD THE KEY FOR MORE DELTA AIR LINES STOCK GAINS

Low expectations could keep DAL stock surging

Travel stock Delta Air Lines, Inc. (NYSE:DAL) is in a strong technical position, and looks poised to go higher. The shares are up nearly 21% year-over-year, and just last week made a decisive move above their year-to-date breakeven point and the $50.76 level -- half their all-time peak. After taking a sharp bounce of its 200-day moving average in April, DAL is now staring down its 52-week high, and an unwinding of pessimism could help the stock take out this milestone.

One group that could provide an upside catalyst for Delta is short sellers. These bears have continued to target the shares, with short interest more than doubling since its October low -- yet DAL shares have continued to rally. This points to underlying technical strength from the equity, and also suggests the shares could benefit from a short-squeeze scenario.

Not only that, but options traders have been unusually bearish, with DAL’s 10-day put/call volume ratio of 0.95 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) topping 98% of readings from the past year. An exodus of these doubters could also spark additional upside. Plus, oil prices have been falling, with large speculators unwinding their long positions, which should act as a boon to the airline sector.

Finally, it’s a good time to target DAL options. This is based on the stock’s 30-day at-the-money implied volatility of 26%, which ranks in the low 12th annual percentile, and falls in line with historical volatility levels.

CALL TRADERS JUMP ON VALEANT STOCK AFTER BLOOMBERG REPORT

VRX shares have been more volatile than the options market has expected during the past year

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares are trading 2% higher today at $12.59, after Bloomberg reported the company is in talks to sell Bausch & Lomb's eye-surgery business. Options traders have been quick to respond, with buy-to-open activity possibly taking place at the weekly 6/9 13-strike call, and the June 14 call. If long positions are being initiated here, traders are betting VRX stock will topple the strikes before the options' respective expirations at this Friday's close, and the close on Friday, June 16.

Call buying has been the norm on Valeant stock for some time. In fact, the shares have a 50-day call/put volume ratio of 2.82 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which is an annual high.

But no matter if it's calls or puts you're targeting, it's a good time to buy premium on VRX. This is according to the equity's Schaeffer's Volatility Index (SVI) of 54%, which is just 10 percentage points from an annual low -- hinting at unusually low volatility expectations being priced into near-term options. Plus, Valeant has a Schaeffer's Volatility Scorecard (SVS) of 89, showing it's regularly exceeded options traders' volatility expectations during the past year.

Turning back to the charts, VRX shares have bounced back since bottoming at an eight-year low near $8.30 back on April 24. More recently, Valeant stock has been trading around its flattening 100-day moving average, and has trimmed its year-to-date deficit to 13%.