We finally saw the CPI numbers yesterday and though they were only .2% above estimates this was enough to tank the markets. We even saw names like AAPL fall over 5%. When was that last time you saw that happen? The reason for the drop is tied to the belief that now that the Fed will continue on it’s hawkish path of raising interest rates and may even raise the more than expected to battle this inflation. This morning we will next see the PPI (Producer Price Index) or the gauge on if producers/businesses are also seeing inflation like the consumer. This print should also make an impact.
In the midst of the drop yesterday we saw many names go below their Dark Pool prints and of course, the seemed to be mostly puts on the day. However, one name has stood out to me this week despite the volatility, that name is Deutsche Bank AG (DB). DB had some very large size calls for November 10 hit the scanner on Monday. They were large enough to pay attention to.
However what stood out yesterday was that DB, despite the large drop in the market continued to see calls on the unusual options scanner. These calls totaled almost 10,000 like the day before but this time for the October $10 calls. So, two straight days of call in Deutsche Bank in the midst of a market drop.
The technicals of the DB chart suggest that after having made a higher low on the daily we could see more upside. Monday DB tested the key resistance line of $9.40 which has a gap above it at $9.50. If price were to get into this gap it could push all these calls in the money.