Wednesday’s Options Alerts
Three for three in Tuesday’s
session. All three of the ETFs
notched losses between 1.0% and 1.75% as three solid earnings reports from
major companies (3M, Citigroup and JNJ), a positive December Housing Starts
number, and a bullish upgrade of some semi equipment manufacturers failed to
sway investors from taking a further chunk out of the bull.
The ETFs are all testing retracements between the
70% and 78% Fibonacci support level from the late December lows. Volatility is
picking up, but is still not registering panic. We are getting to that time when
the oversold crowd will come into the market to support prices, but let someone
else pick the bottom. Our goal is to place our bets when the table is in our
favor.
The
(
$VIX |
Quote |
Chart |
News |
PowerRating) and the
(
$VXN |
Quote |
Chart |
News |
PowerRating) finished
up on the session, with near identical gains of 1.90 points. The VIX is now
trading above its recent low level trading range, but the VXN is still
“coiled” inside this congestion area. The CVR is not registering any
signals this evening, but the CVR III is within a fraction of a point at this
time. The III has been the most consistent signal, so I like to pay special
attention to it, especially as a confirmation tool. Remember though, price and
volume first, and signals as a secondary indicator.
One last note. While volatilities have picked up,
they are still the way to play the markets. At this time, since we don’t have
the luxury of expiring options with which to execute as a proxy (no premium or
very little), versus outright stock, I would suggest verticals as a way to place
our bets. Have a good evening.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 30.59 | Up +1.90 |
None |
9.54% Above |
Not At Extreme |
| VXN | 44.75 | Up +1.90 | None |
0.0% | 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 |
| BB&T Corp |
BBT |
-8% |
4292 | 752 |
| Bed Bath & Beyond | BBBY |
-4% | 12748 | 2186 |
| Target | TGT |
-4% | 11732 | 3181 |
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 |
| BB&T Corp |
BBT |
24 | 21.5 | 36.8 | 15.4 |
| Coach | COH | 57 | 51.2 | 77 | 40.6 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Sunrise Assisted Living |
SRZ |
43.3 | 47.8 | 82 | 36.7 |
Please use stops on every trade!