Friday’s Options Alerts
Big Blue ignited a
big rally today as positive
earnings overpowered mixed economic data. Yesterday, stocks declined after Intel
missed its numbers, but today investors focused on
better-than-expected results from IBM
(
IBM |
Quote |
Chart |
News |
PowerRating), Eastman Kodak
(
EK |
Quote |
Chart |
News |
PowerRating), United
Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating), Nokia
(
NOK |
Quote |
Chart |
News |
PowerRating) and Northwest Airlines
(
NWAC |
Quote |
Chart |
News |
PowerRating).
Economic data was
mixed today as employment and manufacturing data showed weakness while housing
data continued to be strong. The October Philly Fed Index fell to a reading
of -13.1 from last month’s 2.3 reading. This was much worse than the
expected reading of 0.6. Industrial production for September also came in worse
than expected, industrial production dropped 0.1% compared with estimates for a
gain of 0.1%.
Capacity utilization came in at 75.9 slightly below the expected
reading of 76. In additon, initial jobless claims jumped by 22,000 to
411,000. On the positive side, housing starts for September shot up 13.3% to an
annual rate of 1.84 million. This was also a 16-year high. Building permits also
jumped 3.7%.
At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) erased yesterday’s losses and gained 238.86 points or
2.97%. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) gained 19.17 points or 2.22% and, the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) jumped 39.79 points or 3.22%.
Semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) up 8.65%, airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating) UP 7.43%,
software
(
$GSO.X |
Quote |
Chart |
News |
PowerRating) UP 5.37%, and broker dealers
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) were the biggest
winning sectors
of the day.
Losing sectors of the day were health providers
(
$RXH.X |
Quote |
Chart |
News |
PowerRating)
down 1.33%, gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) down 1.10%, and retail
(
$RL.X |
Quote |
Chart |
News |
PowerRating) down 1.08%
thanks to Sears
(
S |
Quote |
Chart |
News |
PowerRating). After the bell, Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating) and Ebay
(
EBAY |
Quote |
Chart |
News |
PowerRating)
surpassed earnings estimates. Look for another pop tomorrow, but be careful as
this market is overbought.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near its highs and closed near the lows of the day. This shift in intraday sentiment shows a
drop in fear. The VIX didn’t trigger any CVRs, but we are close to a 3 sell. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened in the bottom half of its range and near its
midpoint. This shift
in intraday sentiment shows a rise in fear.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 40.16 | DOWN 1.81 | NONE | 9.99% Below | Close to Extreme |
| VXN | 56.22 | DOWN 0.65 | NONE | 5.61% Below | Not At Extreme |
Abnormal Options Volume With Price Movement
—
Abnormal options volume (calls and puts) with stock price movement
| Name | Symbol | Net % Change |
Volume | Avg. Volume |
| SAP | SAP |
+ 25.74 | 1700 | 298 |
| Sandisk | SNDK |
+ 21.21 | 6711 | 1496 |
| New Century Financial | NCEN |
+ 12.12 | 2329 | 544 |
| Northrop Grumman |
NOC |
– 11.74 | 34122 | 3927 |
| PeopleSoft | PSFT |
+ 10.16 | 27854 | 4460 |
| Kaufman & Broad |
KBH |
+ 9.51 | 2346 | 518 |
Stocks With Biggest Spikes in Implied
Volatility — Stocks with biggest increases or decreases in implied
volatility compared to previous day
Spike Up
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
|
Golden State Bancorp
|
GSB |
20.1 | 11.3 | 35.1 | 10.3 |
| Bunge Limited | BG |
46.9 | 37.2 | 45.3 | 24.1 |
| Chubb | CB |
49.1 | 39.2 | 49.6 | 27 |
| Sears | S |
84.2 | 67.7 | 71.6 | 27.9 |
| Advanced Auto Parts |
AAP |
48.7 | 39.3 | 68.8 | 28.8 |
| Anthem | ATH |
47.4 | 39.5 | 50.9 | 26.6 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
|
Unilab
|
ULAB |
47.2 | 61.4 | 76.5 | 29.1 |
| IBM | IBM |
44.5 | 54.3 | 58.1 | 28.9 |
| Nokia | NOK |
57.7 | 59.9 | 74.7 | 52.1 |
| Symantec | SYMC |
56.7 | 68.6 | 81.8 | 56.6 |
| Sandisk | SNDK |
87.3 | 102.2 | 103.2 | 70.7 |
| Allstate | ALL |
26 | 30.3 | 35.7 | 20.4 |
Please use stops on every trade!