3 Stocks Breaking Out on Big Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

>>4 Huge Stocks on Traders' Radars

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

>>Sell These 5 Toxic Stocks Before It's Too Late

With that in mind, let's take a look at several stocks rising on unusual volume recently.

Maxim Integrated Products

Maxim Integrated Products (MXIM) designs, develops, manufactures, and markets various linear and mixed-signal integrated circuits worldwide. This stock closed up 4% to $33.53 in Monday's trading session.

Monday's Volume: 5.42 million

Three-Month Average Volume: 2.55 million

Volume % Change: 125%

From a technical perspective, MXIM soared higher here right off its 50-day moving average of $32.34 with strong upside volume. This move is quickly pushing shares of MXIM within range of triggering a major breakout trade. That trade will hit if MXIM manages to take out some near-term overhead resistance levels at $33.70 to its 52-week high at $33.78 with high volume.

Traders should now look for long-biased trades in MXIM as long as it's trending above its 50-day at $32.34 or above more near-term support at $31.30 and then once it sustains a move or close above those breakout levels with volume that hits near or above 2.55 million shares. If that breakout triggers soon, then MXIM will set up to enter new 52-week-high territory above $33.78, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45.

Bluebird Bio

Bluebird Bio (BLUE), a clinical-stage biotechnology company, focuses on developing gene therapies for severe genetic and orphan diseases. This stock closed up 6.1% to $26.73 in Monday's trading session.

Monday's Volume: 485,000

Three-Month Average Volume: 228,857

Volume % Change: 119%

From a technical perspective, BLUE ripped sharply higher here with above-average volume. This stock has been uptrending strong for the last few weeks, with shares moving higher from its low of $17.40 to its intraday high of $27.18. During that uptrend, shares of BLUE have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of BLUE within range of triggering a major breakout trade. That trade will hit if BLUE manages to take out some key overhead resistance levels at $28.08 to $28.98 with high volume.

Traders should now look for long-biased trades in BLUE as long as it's trending above Monday's low of $24.79 and then once it sustains a move or close above those breakout levels with volume that hits near or above 228,857 shares. If that breakout gets underway soon, then BLUE will set up to re-test or possibly take out its next major overhead resistance levels at $32 to $34.

Grifols

Grifols (GRFS), a specialty biopharmaceutical company, develops, manufactures, and distributes a range of plasma derivative products primarily in the European Union, Spain, the U.S., Canada, and internationally. This stock closed up 3.2% at $42.12 in Monday's trading session.

Monday's Volume: 1.10 million

Three-Month Average Volume: 622,295

Volume % Change: 89%

From a technical perspective, GRFS spiked notably higher here right off its 50-day moving average of $40.71 with above-average volume. This spike higher on Monday is quickly pushing shares of GRFS within range of triggering a major breakout trade. That trade will hit if GRFS manages to take out some key overhead resistance levels at $42.28 to $42.87 and then once it clears its 52-week high at $43.45 with high volume.

Traders should now look for long-biased trades in GRFS as long as it's trending above its 50-day at $40.71 or above more near-term support at $39.35 and then once it sustains a move or close above those breakout levels with volume that hits near or above 622,295 shares. If that breakout materializes soon, then GRFS will set up to enter new 52-week-high territory above $43.45, which is bullish technical price action. Some possible upside targets off that move are $48 to $50.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Set to Soar on Bullish Earnings

>>5 Stocks Ready to Break Out

>>5 Rocket Stocks Ready for Blastoff

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Is Medicare enough?

If you're considering getting supplement insurance, or Medigap, sign up within six months of enrolling in Medicare.

NEW YORK (Money Magazine) My father just went on Medicare. Should he buy Medigap insurance? Which policy is best? -- Joe, Houston.

If your dad isn't insured by a former employer, he should buy supplement insurance, or Medigap, which pays for some costs not covered by Medicare.

Ultimate Guide to Retirement Getting started401(k)s & company plansInvestingAnnuitiesIRAsSelf-employment plansPensions and benefit plansSocial SecurityInsuranceEstate planningLiving in retirementGetting help

And, says Bonnie Burns, a policy specialist with California Health Advocates, he should sign up within six months of enrolling in Medicare, when he can't be rejected for health reasons (some states let you qualify later on for a similar six-month window if your employer plan is canceled).

Since switching policies later may involve a physical, your dad's best plan is one that suits him over time, not just one that meets his needs cheaply now.

All policies must match one of Medicare's 10 standardized plans -- from basic coinsurance to coverage of skilled nursing. Learn more at Medicare.gov.

Ask Matt: What's the best way to invest $100?

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.

Q: What's the best way to invest $100?

A: Online trading has definitely opened the door to beginning investors. You can get started with investing, whether you have $1,000, $100, or even less at some brokerages.

Beginning investors have to deal with two primary barriers: minimum deposits and fees. You need to pay close attention to both these barriers to get started. Many, but not all, mainstream online brokerage firms require investors to have at least $1,000 to start.

TRACK OUR STOCKS: Get real-time quotes with our free Portfolio Tracker

For investors with just $100 to invest, the best place to start is with commission-free investments at a firm with no minimum deposit. One option might be to open an account with TD Ameritrade, which has no minimum deposit. Additionally, TD Ameritrade offers more than a 100 exchange-traded funds, or ETFs, that you can buy and sell for no commission.

ETFs are stocks you can buy that own hundreds of stocks. ETFS are a good way to spread your bet, and keep your expenses low.

If you'd rather invest in individual stocks, and not ETFs, another option is Loyal3. This online brokerage allows you to buy from a limited menu of popular stocks, like Disney, Berkshire Hathaway and Starbucks, and pay no commission. Remember if you go this route, it is up to you to make sure you spread your money around a variety of stocks.

Budget deficit declining faster than predicted

WASHINGTON — The federal budget deficit has fallen sharply over the past few years and is on track to decline even further, according to a new report from the Congressional Budget Office.

The deficit this year is expected to be $514 billion — just 3% the size of the economy and significantly less than the $1.4 trillion deficit Congress ran up when it pumped stimulus into the economy in 2009.

The non-partisan budget office has been reporting declining deficits ever since, but Tuesday's report shows that the deficits are shrinking faster than predicted. This year's deficit is $46 billion smaller than CBO projected last year, and over 10 years those projections add up to $1 trillion in smaller deficits.

Why? The CBO says federal revenues are increasing by 9% and short-term spending cuts have held spending increases to just 2.6%.

Deficits are expected to decline this year and next, and then start rising again because of increased health insurance subsidies under the Affordable Care Act, mounting interest costs and an aging population receiving more entitlements, the report said.

STORY: Health law could mean fewer full-time workers, CBO says

And the national debt — the cumulative effect of those annual budget deficits — is still a problem, the CBO said. The debt will be $17.6 trillion this year, growing to a projected $27.2 trillion by 2024.

"Such large and growing federal debt could have serious negative consequences, including restraining economic growth in the long term, giving policymakers less flexibility to respond to unexpected challenges, and eventually increasing the risk of a fiscal crisis," the report said.

The White House said deficits of less than 3% of the economy are ideal. "The most important thing is that you're getting your debt down as a percentage of the economy, and that it's on a downward path," said Jason Furman, chairman of the Council of Economic Advisers. But he acknowledged that the CBO is projecting deficits to turn the corner! again by 2016. "They're not saying we've solved our fiscal problems."

On Capitol Hill, Republicans and Democrats alike credited bipartisan budget agreements for helping to make progress -- but they also agreed that more work needs to be done.

"Today's report is an important reminder that the debt won't take care of itself — we must take action," said Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee.

Senate Budget Committee Chairwoman Patty Murray, D-Wash., said the report "offers encouraging evidence that our near-term fiscal outlook continues to improve, although there is much more we need to do to tackle our long-term budget challenges."

Follow @gregorykorte on Twitter

Deadline Passed, What's Next for You and Obamacare

Joe Raedle/Getty ImagesElva Garcia gets help signing up for health insurance through the Affordable Care Act at a Miami Enrollment Assistance Center on Monday. CHICAGO -- The deadline has passed, and so too the surprise grace period, for signing up for health insurance as part of the nation's health care law. Now what? For those who were able to navigate the glitch-prone and often overwhelmed HealthCare.gov website, there's still work to be done to make sure success online leads to actual coverage come the new year. The first step experts recommend is to call your insurance company and double-check they received your payment. What if you missed the Christmas Eve deadline and still want insurance in 2014, as the health law requires of most Americans? You may be without health insurance for a month, but you can still sign up for coverage that will start in February. "Be patient, because they're trying to help you," said Tina Stewart, a 25-year-old graduate student in Salt Lake City who succeeded in enrolling in a health plan Tuesday morning. "It will take time." The historic changes made by the Affordable Care Act take full effect on Jan. 1. People with chronic health conditions can no longer be denied health insurance. Those who get sick and start piling up medical bills will no longer lose their coverage. Out-of-pocket limits arrive that are designed to protect patients from going bankrupt. But unless the 1 million Americans who have so far enrolled for coverage via the new marketplaces make sure their applications have arrived at their new insurance companies without errors, some may find they're still uninsured when they try to refill a prescription or make a doctor's appointment. "The enrollment files have been getting better and more accurate, but there is still work that needs to be done," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, a trade group that represents the private insurance industry. "The health plans are still having to go back and fix some of data errors coming through in these files." If everything went smoothly, consumers can expect to see a welcome packet arrive in the mail from their insurance company, Zirkelbach said. If not, a phone call to the insurer might clear things up. "If a consumer signed up yesterday, they shouldn't expect the health plan to have their enrollment application today," Zirkelbach said. "Allow a couple of days to receive and process those enrollments." Paying the first premium is crucial. Because of the changing deadlines for enrollment, most insurers have agreed to allow payments through Jan. 10 and will make coverage retroactive to Jan. 1, he said. Anyone who missed the Christmas Eve deadline to enroll for insurance to start in January can still apply at HealthCare.gov for coverage to begin later. The federal website serves 36 states, but also directs people elsewhere to the online insurance site serving their state. The site also offers directions to local agencies offering in-person help. After the disastrous rollout in October, the federal website received 2 million visits on Monday, and heavy -- but not as heavy -- traffic on Tuesday. White House spokeswoman Tara McGuinness said she had no immediate estimate of visitors Tuesday or how many succeeded in obtaining insurance before the midnight Christmas Eve deadline. The unexpected one-day grace period was just the latest in a string of delays and reversals. Unless you qualify for Medicaid, you'll pay a monthly "premium" fee to an insurance company for coverage. Before the company covers actual medical costs, you may have to pay a certain amount called a deductible, in addition to a possible set fee for a doctor visit (copay) or a percentage of the cost of a medical service (coinsurance). Federal tax credits are aimed at helping make premiums more affordable for households earning between 100 percent and 400 percent of the federal poverty line. That's $11,490 to $45,960 for an individual, $23,550 to $94,200 for a family of four. Finally, note the next significant deadline isn't for a few more months. If you don't have coverage by March 31, you'll pay a tax penalty next year of $95 or 1 percent of your income, whichever is higher. Ron Pollack, president of Families USA, a liberal advocacy group that has led efforts to get uninsured people signed up for coverage next year, said that's the deadline that matters most. "The real significant deadline is March 31," Pollack said. "The enrollment period extends for another three months."

Here are some tips for those who met Tuesday's deadline to enroll via HealthCare.gov for health insurance that starts Jan. 1 and those who didn't.

Slow shopping season to spur sleigh full of deals

Shopping in stores just crawled along this holiday season, leaving a pile of unsold inventory. That means bigger-than-usual after-Christmas sales.

You don't even have to wait until the 26th.

"Promotions have already crept into the irrational zone — north of 50% off," says Brian Sozzi, CEO of Belus Capital Advisors. "The season so far was a full-on Debbie Downer. After Christmas a black plague of promotions will sweep throughout the malls and stores — 50, 60, 70% off."

Amazon.com's "2013 After-Christmas Sale" is already rolling with such offers as 70% off on select clothing, shoes, watches and jewelry. Old Navy launched its "After Holiday Sale" on Sunday with markdowns up to 75%.

Sales growth this year is likely to be the weakest since 2009: 3.2%, says Chris Christopher, director of consumer economics at IHS Global Insight.

"Overall, the holiday retail sales season is not the best," he says. "Online is up tremendously from where it was five years ago, but everyone is hurting on the margins because of the discounting and the free shipping."

Holiday online retail sales are projected to grow 13.5% over last year, Christopher says.

For the last full week of shopping Dec. 16-22, in-store retail sales were down 3.1% from the same week last year, according to ShopperTrak, which analyzes retail shopping trends.

"Traffic is down dramatically, and that's driven by the ability to virtually window shop," says ShopperTrak founder Bill Martin. In fact, the number of people visiting brick-and-mortar stores was down 21.2% from the same period in 2012.

"Being a 26-day season rather than a 32-day season has just been a huge difference," says Brad Wilson, editor in chief of BradsDeals.com. Retailers "are going to have to pick up a lot on the back end."

Wilson says the big sales have pros and cons. Pros: huge discounts — sometimes more than 70%. Cons: Merchandise will be random — whatever is left.

"We have become so sensitized to discounts, so retailer! s now have to be very aggressive to get our attention," Wilson says.

One area where sales are looking up: mobile shopping. About 18% of online holiday purchases were made on mobile phones, up from 12% last year, says Corey Pierson, CEO of Custora, which tracks data from more than 100 online retailers.

Online and mobile sales are putting brick-and-mortar stores in a pinch. "They are not only competing with each other, they are competing with with cyber-stores too," Christopher says.

For retailers, the next job is getting customers back into their stores after the Christmas rush — a difficult task, says Steven Keith Platt, director of the Platt Retail Institute.

"People just aren't spending," Platt says, "and retailers are having to deal with that. They have to aggressively push these huge discounts and just hope they can extend out the holiday."

Target, which suffered a data breach on 40 million credit card accounts, had even more bad news after trying to make up for that damage with a storewide 10% discount this weekend.

The number of transactions at Target slipped 3% to 4% on Saturday compared with the Saturday before Christmas last year, says Craig Johnson, president of retail consultancy Customer Growth Partners.

"Virtually everybody that they compete against — Walmart, Kohls, Costco — was up, and they were down," Johnson says.

Ask Matt: Are stock buybacks easy money or hype?

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.

Q: Are stock buybacks really easy money for investors?

A: Investors know the buyback drill. A company announces a plan to either buyback shares or boost an existing buyback plan, and the stock often goes higher.

Investors love buybacks because, in theory, the company is using its cash to reduce the number of shares outstanding. The fewer shares outstanding, the fewer slices earnings must be cut into. That means each investor should get a bigger part of the bottom line.

TRACK YOUR STOCKS: Get real-time quotes with our free Portfolio Tracker

That's the theory. But the reality is much different. Companies spent 39.5% more in the third quarter buying back their stock than they did in the same period of 2012. Interestingly, because of the stock market rally, companies paid nearly 20% more during the quarter to buy the shares than they would have a year ago.

Is this spending paying off for investors? Not really. Companies have been issuing new shares, in large part as payment to officers and employees, negating at least part of the benefit of the buybacks, says Howard Silverblatt of S&P Dow Jones Indices.

The number of shares outstanding actually rose about 1% in the third quarter, he says. Investors must be careful to not assume that just because a company is buying back its shares, that it will benefit them.

4 Financial Stocks Rising on Big Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

>>5 Big Stocks to Trade for Big Gains

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

>>5 Stocks Poised to Pop on Bullish Earnings

With that in mind, let's take a look at several stocks rising on unusual volume today.

Artisan Partners Asset Management

Artisan Partners Asset Management (APAM) is an independent investment management firm that provides a range equity investment strategies spanning different market capitalization segments and investing styles in both U.S. and non-U.S. markets. This stock closed up 3.3% to $54.75 in Monday's trading session.

Monday's Volume: 400,000

Three-Month Average Volume: 58,920

Volume % Change: 352%

>>5 Stocks Poised for Breakouts

From a technical perspective, APAM spiked higher here right above its 50-day moving average of $51.32 with strong upside volume. This stock has been uptrending strong for the last two months, with shares soaring higher from its low of $46.02 to its recent high of $55.99. During that uptrend, shares of APAM have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of APAM within range of triggering a near-term breakout trade. That trade will hit if APAM manages to take out Monday's high of $55.80 and then its all-time high at $56.07 with high volume.

Traders should now look for long-biased trades in APAM as long as it's trending above Monday's low of $52.88 or its 50-day at $51.32 and then once it sustains a move or close above those breakout levels with volume that hits near or above 58,920 shares. If that breakout hits soon, then APAM will set up to enter new all-tim- high territory above, which is bullish technical price action. Some possible upside targets off that breakout are $60 to $65.

Xoom

Xoom (XOOM) provides online consumer-to-consumer international money transfers in close to 30 countries. This stock closed up 4.5% at $35.08 in Monday's trading session.

Monday's Volume: 1.13 million

Three-Month Average Volume: 490,149

Volume % Change: 111%

>>5 Rocket Stocks to Buy Now

From a technical perspective, XOOM ripped higher here right above some near-term support at $33.04 with strong upside volume. This move is quickly pushing shares of XOOM within range of triggering a big breakout trade. That trade will hit if XOOM manages to take out some near-term overhead resistance levels at $35.88 to its all-time high at $36.46 with high volume.

Traders should now look for long-biased trades in XOOM as long as it's trending above Monday's low $33.88 or above more near-term support at $33.04, and then once it sustains a move or close above those breakout levels with volume that this near or above 490,149 shares. If that breakout hits soon, then XOOM will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45.

Proassurance

Proassurance (PRA) provides professional liability insurance products to health care service, legal service and other professional service providers in the U.S. This stock closed up 2.2% at $47.40 in Monday's trading session.

Monday's Volume: 855,000

Three-Month Average Volume: 332,423

Volume % Change: 185%

>>5 Stocks Under $10 Set to Soar

From a technical perspective, PRA gapped higher here back above its 50-day moving average of $46.29 with above-average volume. Shares of PRA also flirted with its 200-day moving average at $47.92, before closing just below that level at $47.40. This stock has been uptrending strong for the last few weeks with strong upside volume flows, since the stock has pushed higher from its low of $42.29 to its intraday high at $48.28. During that uptrend, shares of PRA have been consistently making higher lows and higher highs, which is bullish technical price action.

Traders should now look for long-biased trades in PRA as long as it's trending above its 50-day at $46.29 or above $45 and then once it sustains a move or close above Monday's high of $48.28 with volume that's near or above 332,423 shares. If we get that move soon, then PRA will set up to re-test or possibly take out its next major overhead resistance levels at $50 to $52.

Aviv Reit

Aviv Reit (AVIV) operates as a self-administered, self-managed real estate investment trust specializing in the ownership and triple-net leasing of post-acute and long-term care skilled nursing facilities. This stock closed up 2.8% at $24.70 in Monday's trading session.

Monday's Volume: 463,000

Three-Month Average Volume: 147,886

Volume % Change: 250%

>>5 Stocks With Big Insider Buying

From a technical perspective, AVIV trended up here right above its 50-day moving average of $23.06 with heavy upside volume. This move pushed shares of AVIV into breakout territory, since the stock took out some near-term overhead resistance at $24.69. Prior to this breakout, shares of AVIV have been uptrending strong, with the stock moving higher from its low of $21.31 to its intraday high of $24.77. During that move, shares of AVIV have been consistently making higher lows and higher highs, which is bullish technical price action.

Traders should now look for long-biased trades in AVIV as long as it's trending above its 50-day at $23.06 and then once it sustains a move or close above Monday's high of $24.77 with volume that's near or above 147,886 shares. If we get that move soon, then AVIV will set up to re-test or possibly take out its next major overhead resistance levels at $26 to $26.65. Any high-volume move above those levels will then give AVIV a chance to tag $28 to $29.

To see more stocks rising on unusual volume, check out the Stocks Rising pn Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Under $10 to Trade for Breakouts

>>The Pros Hate These 5 Stocks -- Should You?

>>Why I'm Sticking By Dow 55,000

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Will Recent Deal Discussions Boost Netflix?

With shares of Netflix (NASDAQ:NFLX) trading around $324, is NFLX an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Netflix is an Internet subscription service that streams television shows and movies. The company's subscribers can watch unlimited television shows and movies streamed over the Internet to their televisions, computers, and mobile devices. In the United States, subscribers can also receive DVDs delivered to their homes. Netflix has revolutionized the television and movie industry with its services.

Netflix is reportedly in negotiations with pay-TV providers Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC), among others, to provide its service as a part of pay-TV packages and allow pay-TV providers to include Netflix as an app on their set-top boxes. According to people familiar with the matter who spoke to the Wall Street Journal, talks are in early stages and could still break down. Netflix cut a similar deal with the U.K.'s Virgin Media recently, but pay-TV and Netflix are still enemies in many ways, although they are apparently willing to explore partnerships.

T = Technicals on the Stock Chart Are Strong

Netflix stock has been exploding higher over the last several years. The stock is currently trading slightly below all-time high prices and looks set to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Netflix is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Netflix options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Netflix Options	70.48%	90%	88%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
October Options	Flat	Average
November Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Netflix’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Netflix look like and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	345.45%	162.50%	-78.96%	-88.79%
Revenue Growth (Y-O-Y)	20.23%	17.72%	7.96%	10.13%
Earnings Reaction	-4.46%	24.28%	42.22%	-11.87%

Netflix has seen improving earnings and rising revenue figures over the last four quarters. From these numbers, the markets have had mixed feelings about Netflix’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Netflix stock done relative to its peers, Amazon (NASDAQ:AMZN), Comcast (NASDAQ:CMCSA), Outerwall (NASDAQ:OUTR), and sector?

	Netflix	Amazon	Comcast	Outerwall	Sector
Year-to-Date Return	244.30%	23.85%	24.09%	23.26%	38.57%

Netflix has been a relative performance leader, year-to-date.

Conclusion

Netflix is a streaming services that provides video entertainment to consumers in the United States. The company is reportedly in talks with top pay-TV providers in order to bring its product to the pay-TV networks. The stock has been exploding higher and is now trading slightly below all time high prices. Over the last four quarters, earnings have been improving while revenues have been rising which has produced mixed feelings among investors about recent earnings announcements. Relative to its peers and sector, Netflix has been a year-to-date performance leader. Look for Netflix to continue OUTPERFORM.

Royal Mail’s $5.3 Billion IPO Said to Be Fully Subscribed

Royal Mail Group Ltd. has buyers for all shares to be sold in an initial public offering valuing the 360-year-old U.K. postal service at as much as 3.3 billion pounds ($5.3 billion), two people briefed on the matter said.

The sale began today and was fully subscribed within hours, mainly on demand from institutions, according to the people, who asked not to be named because an update on the fundraising was sent only to investors. Royal Mail shares, open to applications until Oct. 8 before trading commences on Oct. 11, will be priced at 260 pence to 330 pence apiece, according to a statement.

The Royal Mail selloff will be the biggest privatization in the U.K. since former Prime Minister John Major broke up British Rail in the 1990s. The volume of IPOs in Europe has tripled in the year-to-date versus 2012, data compiled by Bloomberg show, as investors are drawn by strengthening economies in the region.

"We are encouraged by the interest shown by potential investors so far," Business Secretary Vince Cable said in the government statement. "This will give Royal Mail access to the private capital it needs to modernize."

Royal Mail, which is based in London, will have a market capitalization of between 2.6 billion pounds and 3.3 billion pounds once listed, with 401 million to 522 million shares due to be sold, equating to as much as 52.2 percent of its capital.

Government Stake

The future of the remaining state shareholding will be determined later, Minister for Business and Enterprise Michael Fallon told Bloomberg Television today. Postal services "aren't businesses that sit naturally in the public sector," he said, adding: "Its future lies in the private sector."

The U.K. government wouldn't be able to block a foreign takeover of Royal Mail once the shares are traded, Fallon said, while adding that the company will have access to capital needed to expand internationally as other nations open postal markets.

Royal Mail has a 53 percent share of U.K. parcel deliveries and reported revenue of about 9.1 billion pounds in fiscal 2013. Its operating profit, after some costs, was 440 million pounds.

One of the country's largest employers with more than 150,000 staff, Royal Mail has shifted away from letters to more lucrative package shipping, competing with TNT Express NV (TNTE) of the Netherlands and Deutsche Post AG (DPW)'s DHL Express.

The government, which decided in 2011 to privatize Royal Mail, will retain between 37.8 and 49.9 percent of stock, assuming no over-allotment options. A further 15 percent of shares may be made available beyond the base offer, it said.

Strike Poll

The government expects about 70 percent of the base offer to go to institutional investors and the rest to retail buyers and Royal Mail workers. The minimum application for the retail offer is 750 pounds of stock, or 500 pounds for employees.

Staff, some of whom plan to strike over the sale, will also be handed a total of 10 percent of the shares for free out of the government holding, valued at as much as 331 million pounds.

The Communications Workers Union said in a statement that the IPO is driven by "political dogma" and that Royal Mail can be profitable and successful under public ownership. A strike ballot closes Oct. 16, with walkouts possible from Oct. 23.

Britain's opposition Labour Party said today Royal Mail is being sold so ministers "can raise a quick buck" amid concern about the possible impact on local communities, adding that privatizing such a profitable business "makes no sense."

Bookrunners for the sale are Goldman Sachs Group Inc., UBS AG (UBSN), Barclays Plc (BARC) and Merrill Lynch & Co., with Investec Ltd., Nomura Bank International Plc and RBC Europe Ltd. lead managers, said the government, which is being advised by Lazard Ltd. (LAZ)

Royal Mail will have an implied dividend yield of 6.1 to 7.7 percent of its initial market value for the year ending March 31, with a notional full-year dividend of 200 million pounds, the statement said. For the period in which the shares will actually be traded the payment will be 133 million pounds.

The Deal: Lehman Makes Its Mark on Bankruptcy's Landscape

NEW YORK (The Deal) -- In the minds of many, Lehman Brothers' collapse and subsequent bankruptcy has served as a turning point in the country's financial landscape.

And while five years have gone by since the epic Chapter 11 filing on Sept. 15, 2008, its influence remains strong. For example, the movement behind the possible creation of a Chapter 14 of the U.S. Bankruptcy Code that would just be for financial institutions is a direct response to Lehman.

Meanwhile, the Lehman petition was clearly the impetus behind at least one piece of legislation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, designed to improve accounting transparency among financial institutions and prevent future taxpayer bailouts of them.

Less clear is how "the skinniest Chapter 11 petition in history," as debtor counsel Harvey Miller of Weil, Gotshal & Manges LLP called it recently, inspired the speed at which bankruptcy sales were done in the cases of General Motors (GM) and Chrysler, which filed within two months of each other in the spring of 2009 and were sold in as lightning-quick a fashion as Lehman's North American investment bank and brokerage assets. Without question, general market turmoil, an economic freefall and widespread mistrust of the big banks and the regulators tasked with overseeing them followed the brokerage's implosion. "[It was] the biggest unplanned bankruptcy in the history of bankruptcy law, period," said the person presiding over the Lehman case, Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan, during a Sept. 12 teleconference commemorating the five-year anniversary of the filing. "Anyone who was in my overcrowded courtroom [the first day] will remember the experience as absolutely one-of-a-kind, extraordinarily dramatic." The judge, who said he felt an "enormous responsibility" when randomly assigned the case, said the first few days of the case "will go down as the most momentous week in bankruptcy history, full stop." Right off the bat, Peck approved a $1.29 billion sale of Lehman's North American investment bank and brokerage assets to Barclays Capital (BCS) on Sept. 20, 2008, less than a week after the company's filing -- a move Weil's Miller calls "courageous" given the alacrity in which it was done. Chris Kiplok of Hughes Hubbard & Reed LLP, who represented Securities Investor Protection Act trustee James W. Giddens, stated that the Barclays transaction was one of several early case developments that marked "the end, in my mind, of the triage phase. ... We paused and saw that we had the right professionals on the case in the case ... [we knew] we could drive the case instead of having the case drive us."

Daniel Y. Gielchinsky of Higer Lichter & Givner LLP said that critics of the swift nature of the sale are ignoring other instances of fast Section 363 transactions.

"That does occur fairly routinely," he said. "It was imperfect [in] that not all the issues came to light before -- but the [Lehman] judge did what he had to do under the time constraints in realizing the enormity in failing to act in an expeditious matter."

One lawyer whose firm represented one of the parties that had its services contract acquired by Barclays, Christopher A. Ward at Polsinelli Shughart PC, said that because the deal was approved quickly, it made it "hard to dot all your i's and cross all your t's."

Ward says the debtor, the purchaser and the client were unclear at first on whether the contract would even be involved in the Barclays deal -- a position that many found themselves in for some time after the deal closed. Ultimately, the client Ward's firm represented was absorbed under the Barclays deal, but not before months of litigation and back-and-forth over the details of the deal. "It's what needed to be done, but the rules were definitely bent to get there," he said of Peck's approval. "Getting something done in less than five days was definitely unheard of. It was just unheard of and absolutely unprecedented. No one really knew how to handle it." But he doesn't foresee the Lehman formula for a rapid sale of a major division of a bankrupt business will serve as a playbook for others. "I don't think it has [established a blueprint], because it went so far outside the box to get things done at the outset," Ward said. To be sure, Lehman's bankruptcy may not have set a framework for creative interpretations of the U.S. Bankruptcy Code, but it may trigger changes to the law itself. Peck is co-chair of one of the advisory committees that is exploring adding a Chapter 14 which would include "code reforms that would better match the Bankruptcy Code to the needs of financial institutions," the presiding judge said at the teleconference. "One of the things that we are clearly taking a hard look at are the safe harbors themselves ... and whether they are too broad," Peck said, declining to elaborate because of the ongoing nature of the matter.

Higer Lichter's Gielchinsky said at its core, Chapter 14 would address matters that could affect relationships that are specific to the financial services industry.

"When a large financial institution files for bankruptcy, the automatic market reaction is to make a run for it," Gielchinsky said.

When Lehman filed for bankruptcy, many of its customers tried to close out contracts with the brokerage firm, which had a significant impact on the company's value as a going concern. (As a reference point, in the five days between when the Barclays deal was proposed and its approval, the deal value dipped to $1.29 billion from $1.75 billion because of the market's instability.)

Chapter 14, Gielchinsky explained, would establish a subsidiary to continue to do business with consumers when a major financial institution filed for bankruptcy, "and the market would understand that they are doing business with a new nonbankrupt subsidiary that is adequately funded." While Chapter 14 is still on the drawing board, the Dodd-Frank Wall Street Reform and Consumer Protection Act is a post-Lehman reality because of the financial instability the firm's bankruptcy helped usher in. "Lehman was clearly the catalyst of the financial meltdown and the recession and people think of it as the start of the domino effect that occurred after that," said Mike Gottfried at Landau Gottfried & Berger LLP. "The whole world basically changed after Lehman in a lot of ways." Dodd-Frank's purpose, effective as of July 21, 2010, is to "promote the financial stability of the United States by improving accountability and transparency in the financial system, to end 'too big to fail,' to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes." Under Title II of Dodd-Frank, the Orderly Liquidation Authority has been created, allowing insured depository institutions and securities companies to be liquidated under existing law by the Federal Deposit Insurance Corp. or Securities Investor Protection Corp. Other insurance companies and nonbank financial companies not covered elsewhere can be liquidated under the act, too. Bryan Marsal of Alvarez and Marsal Holdings LLC, who served as Lehman's CEO after the company's filing until 2012, questioned whether Dodd-Frank was the right way to deal with issues related to similar filings, adding that we have "miles to go before we sleep" when it comes to the reform act.

"The [bankruptcy process] works well," Marsal said during the teleconference. "It continued to work well, so why we are moving to a regulator process is a mystery."

Marsal maintained that risk management should not simply be the responsibility of the regulators, but has to start with the company.

Gielchinsky also questioned whether Dodd-Frank would cause more confusion moving forward.

"Dodd-Frank raises questions in and of itself ... is the proper place within the Bankruptcy Code, or is it within Title II's orderly liquidation?" Gielchinsky asked. Polsinelli's Ward contended that Dodd-Frank has provided more clarity, but hasn't exactly accomplished the goals of its mission statement. "It's provided more transparency in the system," Ward said. "It may illuminate some of the issues, but I definitely don't think it has solved the problem." Though questions around Dodd-Frank remain, there has been a consensus that a collaborative attitude from the parties involved has kept the biggest issues in Lehman's complicated case from dragging out even further than it could have. (Though Peck on Dec. 6, 2011, confirmed a liquidation plan that would allow Lehman to unwind its remaining holdings, including real estate, commercial loans and private equity and principal investment over time, Lehman is still disputing claims in the case.) Peck pointed to the establishment of a protocol for dealing with Lehman's numerous international affiliates � 7,000 legal entities located in over 40 countries � as a key force binding the combatants. "There was an extraordinary level of international cooperation and consultation," Peck said during the teleconference. "It was a coalition of the willing." Gielchinsky, who called it the first international protocol of its time, said that he has not yet seen an instance where a similar model has been used but expects it'll rear its head again. "I think that the testament to the collaborative process is the fact that the protocol worked," he said. "Everyone bought into it, the courts largely abided by it, and it should become a model for how large bankruptcy cases should be handled in the future." Miller, while outlining the biggest lessons learned from the case, said, "if parties are rational and if they examine the facts, they will work together to reach a conclusion that benefits everybody."

Peck concurred that the Lehman case shouldn't only be cast in a negative light.

"While Lehman as an event is viewed with a sense of horror, Lehman as a bankruptcy case was actually an effective and efficient way to deal with that failure," Peck said. "I can't say that it can be easily replicated. It happened improvisationally."

-- Written by Kelsey Butler in New York

Ford to Compensate C-MAX Owners for Overoptimistic MPG Ratings

Car shoppers who recently bought a C-MAX Hybrid gas-electric car from Ford (NYSE: F  ) can expect to be getting a check in the mail soon.

On Thursday after market close, Ford announced a series of upgrades to the 2014 model year of the C-MAX Hybrid, ranging from improved gearing and more aerodynamic pillars and deflectors to reduce wind drag to higher-quality engine oil. "The enhancements to the 2014 C-MAX Hybrid are expected to improve customers' on-road fuel economy, especially at highway speeds," said Ford in a statement.

The company also had an announcement to make about fuel economy per se. Finally reacting to criticism that its claimed "47 miles per gallon" fuel economy on the car vastly overstated the C-MAX's actual performance in real life, Ford announced Thursday that it is voluntarily changing the way it measures fuel economy for the C-MAX, which so far has been essentially to test the fuel economy on the company's Fusion Hybrid ... and then assume the same fuel economy applied to the C-MAX as well.

While insisting that this approach conforms to the Environmental Protection Agency's "General Label rules" for advertising fuel economy, Ford says that from here on out, it will test fuel economy on the C-MAX separately and reduce its claimed gas mileage on the vehicle to 43 mpg. To compensate buyers who bought the car on the assumption that the old mpg number was accurate, Ford says it will make "goodwill payments" of $550 to current C-MAX owners and $325 to lessees.

link