Tuesday’s Options Alerts

• June 24, 2002
• TradingMarkets Editors

After five straight weeks of declines,
the major averages started the week off on a positive note as the indices came
back from an early morning sell-off and held strong throughout the rest of the
day. Today’s action broke four consecutive days of losses. After being the
weakest index for the past five weeks, the Nasdaq came within 27 points of its
September lows and then roared to finish 1.34% higher. The Dow
(
$INDU |
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came back from triple-digit losses to gain 0.30% and the S&P 500
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$SPX.X |
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also squeezed out a gain of 1.34%. 

Tech and biotech issues took charge and gained
4% and 3%, respectively. Health care issues, which were strong
performers last week, dropped 3.27%. The markets did shrug off concerns of
economic and corporate earnings growth, corporate accounting, and Middle East
violence, but whether today was just short covering or the start of something
more, remains to be seen. For more information on today’s action, please refer to
the market
recap.

The VIX
(
$VIX.X |
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near the midpoint of its range and closed near the lows of the day. This shift
in intraday sentiment again shows a decrease in fear. No more CVR signals were
triggered today. The VXN
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$VXN.X |
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opened slightly above its midpoint and closed just above its open. This shift in intraday sentiment
shows a small rise in fear. The VXN triggered a CVR
2 and 6 buy signals today.

Points of Significance:

Phillip Morris
(
MO |
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than four times its average volume. Phillip Morris as well as other tobacco
stock (RJR CG) have come under pressure on renewed lawsuit fears. Last week, RJR
was ordered to pay $15 million to a man who had both legs amputated due to
tobacco-related issues.

Oxford Helath.
(
OHP |
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dropped almost 6% on double its average volume. They have fallen for the third
consecutive session following the ruling last week that patients of HMOs have a right to an
independent review if their HMO refuses to pay for a claim. Shares of Oxford
Health have now broken its intermediate term uptrend and its 50-day moving
average. The next minor level of support is at its 38.2% retracement level at
45.81. Look for volatility to increase.

Autozone
(
AZO |
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PowerRating) gained 0.50% on
below average volume. The shares are trading in a symmetrical triangle and could
be a possible straddle play.

Abnormal Options Volume With Price Movement
—
Abnormal options volume (calls and puts) with stock price movement

Stocks With Biggest Spikes in Implied
Volatility — Stocks with biggest increases or decreases in implied
volatility compared to previous day

Spike Up

Spike Down

Please use stops on every trade!