Monday’s Options Alerts
The major indices
indices pulled back on this last trading day of the week as profit-taking came
in. This week was another
strong one for the averages as the Dow and S&P made their fifth straight
week of gains, while the Nasdaq made it to three in a row.
Stocks have come up a
long way since the July 24 bottom as the Dow has gained over 20%, the S&P is up
24%, and Nasdaq up 17%. Some profit taking could be expected, but
today’s sell off was exacerbated by a downgrade of Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) along with
investigations into Citigroup
(
C |
Quote |
Chart |
News |
PowerRating) and AOL
(
AOL |
Quote |
Chart |
News |
PowerRating).
For the day, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
dropped 180.68 points or almost 2%, the S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) fell 21.84
points or 2.26%, and the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) took the hardest hit as it
dropped 42.33 points or almost 3%. For the week, the Dow gained 1.07% while the
S&P gained 1.29%, and the Nasdaq gained 1.39%. It looks that the overbought
condition that was building up for the past two weeks is beginning cool
off. A pullback to the 50-day average would be likely.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near
the lows of day and close near their highs. After registering a drop in fear for
the past 11 out of 14 sessions, it seems that sentiment is changing and
volatility is finally beginning to revert to its mean. The VIX triggered a CVR 2
sell today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped
higher, opened near its lows, and closed near the middle point of its range. This shift
in intraday sentiment also shows a drop in fear. The VXN also triggered a CVR 2 sell today.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 32.81 |
UP 1.85 |
CVR 2 SELLS |
4.06 % Below |
Not At Extreme |
| VXN | 47.62 |
UP 2.62 |
CVR 2 SELLS |
5.23 % 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 |
| Marvell Technology |
MRVL |
+ 17.01 |
6336 |
2091 |
| Lexmark International |
LXK |
– 10.87 |
3573 |
553 |
| Intermune |
ITMN |
– 10.29 |
3474 |
1075 |
| America Online |
AOL |
– 9.31 |
66101 |
27075 |
| Yahoo! |
YHOO |
– 6.01 |
38222 |
3874 |
| Broadcom |
BRCM |
– 4.20 |
14820 |
4885 |
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 |
| TECO Energy |
TE |
44.2 |
36.7 |
47.8 |
16.2 |
| Dollar General |
DG |
57.1 |
47.9 |
53.7 |
37.2 |
| Lexmark International |
LXK |
52.7 |
45.2 |
62.5 |
33.8 |
| Omnicom Group |
OMC |
58.7 |
51 |
91.9 |
24.5 |
| Johnson & Johnson |
JNJ |
31.7 |
27.8 |
46.1 |
18.1 |
| Eli Lilly |
LLY |
38.3 |
33.6 |
47.7 |
21.8 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Golden State Bancorp |
GSB |
13.9 |
16.1 |
35.1 |
18.4 |
| Marvell Technology |
MRVL |
85.3 |
98.8 |
108.7 |
63.6 |
| Puget Sound Energy |
PSD |
20.3 |
23.1 |
32.9 |
22.3 |
| Citigroup |
C |
40.8 |
46.3 |
65 |
23.6 |
| Boyd Gaming |
BYD |
46 |
51.4 |
62.6 |
55 |
| Blockbuster |
BBI |
53 |
58.7 |
66.6 |
40.9 |
Please use stops on every trade!