Wednesday’s Options Alerts

  • February 25, 2003
  • Chris Tyler

When we last off, the VIX and
VXN were seen near price supports, and our general opinion was that daily chart
resistance for the ETFs
should prove to be a formidable opponent for the sharp bear market rally
witnessed. It’s
nice when the market cooperates technically, as it’s done the past two sessions.
Resistance levels held, a beautiful percentage move down ensued, and now like a
wonderfully orchestrated play, we find ourselves bouncing off of technical
support levels as the “Three Little Bears” ( SPYs, DIAs, and QQQs)
close out Tuesday’s trade on an up note.

Believe it or not, on a closing
basis, not much has changed during our little break between columns. The
political landscape is still on rocky ground, but the ETFs are about a
percentage point from our last vantage point. As mentioned, prices in the ETFs
acted according to the VIX crystal ball, but I’ll admit that the VXN has not
shown the same respect. There has been opportunities from this action from both
directions, but one has to stay sharp and focused, especially as we’re seeing in
this news driven environment. And as always, the best way to stay one step ahead
is “to keep it spread”.

 

Points of Significance:

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 36.12 Down
-.64		       CVR
Buy I		 1.5%
Below 		Not
at Extreme
VXN 44.33 Down -.55       
None		 6.45% Below Not
at Extreme

 

Abnormal Options Volume — This list
includes both percentage movers that are normally associated with an increase in
options activity, as well as stocks that have unusually high activity and / or
technical situations,
reflecting increased speculation of a potential price move.

Name Symbol Net
% Change		 Volume Avg.
Volume
Overture
Services 
OVER		      
 -11%		 6456 2967
Home Depot
HD		        +3% 38150 17691
Apache
APA		        -2% 4519 2037
Microchip Technology MCHP        -1% 2596 1108

 

Stocks With Spikes in Implied
Volatility — Stocks with Increases and Decreases in implied
volatility compared to previous day. Candidates are then screened qualitatively.
These lists represent those issues that carry a blend of liquidity and/or
technical setups that might deserve further notice. 

Spike Up

Name Symbol IV Previous
IV		 High
IV		 Low
IV
Webex
Communications
WEBX		 89.5 78.7 113 74.5

 

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
Power
Integrated Circuits
POWI		 61 69 96 57

 

Please use stops on every trade!