Schaeffer's Midday Options Update Features General Electric, ICOS Corp., Citigroup, Ford Motor, and Motorola.

CINCINNATI -- Today's Schaeffer's Midday Options Update features General Electric (NYSE:GE), ICOS Corp. (NASDAQ:ICOS), Citigroup (NYSE:C), Ford Motor (NYSE:F), and Motorola (NYSE:MOT). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most-active calls and puts for the day. The Midday Options Update is published every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU12M&PAGE=1 .

Options Update: More Downside for ICOS Corp.?

A flood of selling has painted the Street red today, with the Dow Jones Industrial Average (DJIA) logging its first triple-digit loss of the new year. Joining the DJIA in one-percent-loss territory this afternoon is the Nasdaq Composite (COMP), while the S&P 500 Index (SPX) is treading just above this region. February crude oil futures are adding to the earnings woes on the Street, as the contract tagged an intraday high of $67.50 per barrel this morning. Violence in Nigeria, global tension regarding Iran following the country's resumption of nuclear activities and an al-Qaida threat on the U.S. are all being blamed for the rise in black gold.

Generally Disappointing

After the close last night, Dow component General Electric (NYSE:GE) said fourth-quarter income dropped to $3.06 billion, or 29 cents per share, down from 53 cents in the previous year. Excluding items, the conglomerate collected 55 cents per share, on par with Street estimates. Revenue inched three percent higher during the three-month period to $40.71 billion, compared to analysts' expectations of $42.1 billion. Looking forward, GE tightened its 2006 earnings outlook, raising the bottom end to $1.94 to $2.02 per share from $1.92 to $2.02 per share.

Winter in the Citi

Elsewhere on the Dow, Citigroup (NYSE:C) reported a 30-percent rise in fourth-quarter net profit to $6.93 billion, or $1.37 per share. However, on an adjusted basis, earnings arrived at 98 cents per share, missing the consensus estimate of $1 per share. Revenue came in at $20.78 billion, about $1 billion below forecasts.

Ford that River

Ford Motor (NYSE:F) announced that it could cut 25,000 or more jobs during the next four years as part of a restructuring to stem North American losses, according to Bloomberg News. F is expected to announce the jobs cuts on Monday. However, a company spokesman declined to verify the job cut report to the wire service.

Suck in an Earnings MOT

Motorola (NYSE:MOT) announced fourth-quarter net income of $1.2 billion, or 47 cents per share. Excluding a one-time gain of 12 cents per share, the firm banked 35 cents, exceeding Street estimates by a penny. Revenue increased 18 percent in the period to $10.43 billion, falling just shy of expectations of $10.5 billion.

Most-Active Options Update

At 1:34 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 10,731.0) has plunged 1.37 percent. The S&P 500 Index (SPX - 1,267.97) has dropped 1.33 percent, and the Nasdaq Composite (COMP - 2,258.1) has given up 1.90 percent. At 1:35 p.m. Eastern time, 4,355,953 calls have changed hands compared to 3,549,193 puts, equaling a single-day put/call volume ratio of 0.81. The CBOE's equity put/call volume ratio weighed in at 0.87.

ICOS Corp.

This morning, Lilly ICOS LLC, a joint venture of Eli Lilly (LLY) and ICOS Corp. (NASDAQ:ICOS), posted a profit of $61.4 million for the fourth quarter. Revenue advanced to $174.5 million from $125.5 million last year. The news sent shares of ICOS soaring sharply higher on the open this morning, and while the stock has since pulled back along with the broad-based weakness in the market, ICOS is still up nearly four percent on the day.

However, looking at a daily chart for ICOS, I see a rather disturbing phenomenon. Despite the obviously positive reaction to this morning's news, the shares were capped by resistance at their 10-day moving average. This is not a positive sign for a stock that has found resistance at its short-term moving averages for the past several weeks.

Furthermore, the past couple of weeks have not been kind to ICOS. The equity has recently given up formerly staunch support at its 10-week and 20-week moving averages. The shares had rallied higher along these trendlines in an uptrend that began in June 2005.

ICOS makes our midday list today due to some rather high volume at its January 25 call. In fact, more than 13,000 of these normally bullishly oriented contracts have crossed the tape so far today on open interest of 16,070 contracts. However, with January options set to expire at the end of today's trading, most of today's activity should be related to either closing of existing positions or rolling out of these positions to later months. We will have to wait until Monday for confirmation, so stay tuned.

The stock's Schaeffer's put/call open interest ratio (SOIR) is also subject to change come Monday, as the front three months of options will drop January from its catalogue. As of right now, ICOS's SOIR of 0.34 ranks below 95 percent of all those taken during the past year. This is a very poor reading indeed for a declining equity, as optimism toward underperformers is viewed in a bearish light from our contrarian point of view.

There is some hope for the shares if they can stage a rebound from their current predicament. Short sellers increased their bets by eight percent during December to a 1.5-year high. Not only do the roughly eight million shorted shares account for more than 12 percent of the stock's total float, but it would take nearly 14 days to cover this collection of bearish bets. However, without the aforementioned rebound, short sellers will be in no rush to cover their positions.

Wall Street is also firmly entrenched in the bearish camp. According to Zacks, seven of the 10 covering analysts rate the shares a "hold" or worse. This could bode well for ICOS, as it increases the chances of upgrades from the collective. However, with no changes forthcoming from today's positive news, I find it rather unlikely that the brokerage bunch will change its mind any time soon.

Click the following link to see a Weekly Chart of ICOS Since June 2005 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=15049 .

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About Schaeffer's Investment Research (www.SchaeffersResearch.com)

Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method .