Monday’s Options Alerts
Stocks reversed
course after some early morning weakness brought on by lukewarm economic data.
The major indices put in a broad-based rally in the face of economic data
showing a somewhat stabilizing job market and declining consumer and business
spending. Unemployment came in slightly better than expected at 5.7% vs. expectations
of 5.8%, but nonfarm payrolls came in at -5K while economist were calling for a
gain of 5K. Meanwhile consumer spending took the biggest dip in 10 months as
personal spending for September dipped 0.4% or more than the 0.2% loss
expected. And finally, the October ISM index declined to 48.5 from
September’s 49.5, slightly lower than the expected reading of 48.9%.
At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) gained 120.61 points or 1.43%. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) gained
15.20 points or 1.71% and the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) gained 30.96 points or
2.32%. Stocks have now made it to four straight weeks of gains. For the week,
the Dow gained 74 points or 0.87%, the S&P gained roughly 3 points or 0.33%,
and the Nasdaq gained 29 points or 2.18%.
The market’s reaction to the data
today was indeed bullish and today’s move puts the major indices near the highs
of the recent trading range. With the S&P closing above 900, the next
resistance would be the 78.6% retracement at 922.97. Surprisingly, there were no
losing sectors today.
Tech sectors saw the most action, the top winners: networking
(
$NWX.X |
Quote |
Chart |
News |
PowerRating)
up 8.13%, semiconductors
(
$SOX.X |
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Chart |
News |
PowerRating) up 6.06%, Internets
(
$INX.X |
Quote |
Chart |
News |
PowerRating) up
5.53%, and oil services
(
$OSX.X |
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Chart |
News |
PowerRating)
up 5.07%, and gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) up 4.68%.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) took a beating today and fell to a two-month low. The
VIX opened near its highs and closed near the
lows of the day. This shift in intraday sentiment still shows a decrease in
fear.
The VIX did not trigger any CVR signals. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) displayed the same action as the VIX, it didn’t trigger any
CVRs either. .
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 33.98 | DOWN 1.93 | NONE |
8.70% Below | Not At Extreme |
| VXN | 49.86 | DOWN 3.13 | NONE | 4.37% 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 |
| Aon Corp. | AOC |
– 9.21 | 3157 | 822 |
| Halibutton | HAL |
+ 5.68 | 11696 | 3793 |
| Watson Pharmaceuticals | WPI |
+ 3.09 | 1933 | 203 |
| Activision | AVTI |
+ 2.92 | 2868 | 807 |
| Deutsche Bank | DB |
+ 2.12 | 2849 | 470 |
| MayTag | MYG |
+ 0.93 | 1717 | 328 |
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 |
|
Saks
|
SKS |
65.8 | 54.9 | 61.4 | 35.7 |
| H.R. Block | HRB |
53.8 | 45.8 | 64.2 | 32 |
| Astrazeneca | AZN |
48.9 | 42.8 | 60.9 | 32.3 |
| Andrx | ADRX |
97.9 | 85.8 | 140 | 80.3 |
| Overture | OVER |
80.4 | 72.6 | 106.9 | 73.6 |
| Tenet Healthcare | THC |
89.8 | 81.6 | 48.8 | 25.1 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
|
Stericycle
|
SRCL |
46.7 | 62 | 73.1 | 37 |
| Gilead Sciences | GILD |
49.2 | 62.7 | 87.8 | 56 |
| Healthcare | HCA |
44.6 | 53.2 | 43.7 | 21 |
| CIGNA | CI |
56.5 | 66.8 | 52.7 | 27.4 |
| United Group | UNH |
35.2 | 41.2 | 48.9 | 26.5 |
| Lifepoint Hospitals | LPNT |
51.1 | 59.1 | 69.1 | 38.7 |
Please use stops on every trade!