Monday’s Options Alerts
No follow through happened after yesterday’s late-day reversal. The markets
did stage a modest decline. No economic news hit the Street today, but
McDonald’s announcement of lower earnings put a damper on the DOW.Â
For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)
opened near its high and closed near the lows of the day. This shift in
intraday sentiment again suggests that fear is dropping. Today’s action triggered
another CVR
VI sell signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened above its midpoint of its
range and closed near just below it. This shift in intraday sentiment also
suggests that fear is dropping. The VXN triggered a CVR II sell signal. Even
with the market declining, we are seeing fear declining — there just is no fear
in the markets. Keep the red flag out as a sizable correction could be in the
works.
Points of Significance:
Nike Inc.
(
NKE |
Quote |
Chart |
News |
PowerRating) dropped 6% on
triple its average volume. Late Thursday the company reported third-quarter earnings that increased 31% and beat expectations by a penny. However
the shares came under pressure as its forecast of future demand disappointed
investors. Nike shares did bounce off its .382 retracement level and found
support at its 50-day moving average.Â
Gold stocks were among the top
performers of the day. Newmont Mining gained 4.5% on heavy volume. The shares
busted out of a two-month-long trading range and are at a new 52-week high.
Gold issues will oftentimes outperform in weak markets or in inflationary
periods. There is heavy activity in the April 25 calls.
Rowan Companies
(
RDC |
Quote |
Chart |
News |
PowerRating) dropped over
5% on about average volume. Oil stocks were hammered today after Salomon Smith
Barney went on a downgrade spree on the belief that first quarter earnings will
be less than expected. The shares are beginning to pullback after its recent run
up. Its implied volatility is somewhat low. Â
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 19.62 | DOWN 0.36 |
CVR VI SELL |
6.48% Below | Not at Extreme |
| VXN | 37.56 | UP 0.58 |
CVR II SELL |
6.40 % 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 |
| Documentum | DCTM | + 11.79 |
243 | 117 |
| Biomet | BMET | – 12.49 |
4142 | 811 |
| IVAX | IVAX | – 8.45 |
6427 | 1698 |
| Nike Inc. |
NKE | – 5.85 |
3007 | 1425 |
| Rowan Companies |
RDC | – 1.28 |
1448 | 624 |
| Newmont Mining |
NEM | + 4.47 |
15054 | 4092 |
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 |
| Daimler Chrysler |
DCX | 38.1 | 31.9 | 55.3 | 31.7 |
| IVAX | IVX | 52.1 | 45.3 | 72.9 | 52.5 |
| Lincare Holding |
LNCR | 44.5 | 38.7 | 69 | 37.2 |
| Seitel | SEI | 75.7 | 66.2 | 66.3 | 47.4 |
| SunGard Data Systems |
SDS | 36.9 | 32.5 | 59.6 | 32.1 |
| PF Chang’s |
PFCB | 37.8 | 34.2 | 72.9 | 37.4 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Applied Materials |
AMAT | 46.4 | 84.4 | 78.3 | 50.3 |
| American Axle |
AXL | 35.9 | 53.6 | 56.1 | 42.8 |
| Tektronix | TEK | 36.3 | 45.8 | 71.7 | 39.6 |
| Toys R Us |
TOY | 39.4 | 45.6 | 53.4 | 45.4 |
| Quintiles | QTRN | 33.2 | 38.4 | 70.2 | 37.3 |
| Digital River |
DRIV | 74 | 83.7 | 94.7 | 80.1 |
Please use stops on every trade!