Friday’s Options Alerts
The major indices
put in a rally early morning as no major surprises came from yesterday’s
certification deadline. However
the announcement of the negative Philly Fed number put a stop to the rally and
the indices chopped back and forth for much of the session before rallying into
the final hour.
At the close, the averages finished higher for the second straight
day. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) gained 74.83 points or 0.85%, it’s next resistance
being at its 50-day moving average at 8880. The S&P
(
$SPX.X |
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Chart |
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PowerRating) gained
10.62 points or 1.15%, also closing in on its 50 day average at
936. The Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) gained 10.71 points or 0.80%.
On the
economic front, the August Philly Fed index had the most impact as it fell to a
reading of – 3.1 vs. July’s 6.6 reading, thus signaling a decline in factory
activity. July industrial production gained 0.2% beating the flat reading
expected by economists. In addition, industrial production came in at 76.1 or
slightly higher than the expected 76% reading. In addition, the weekly initial
claims increased by 6,000 to 388,000. Although this still points to a soft job
market, the release was a non-event.
Best-performing sectors were:
oil services
(
$XOI.X |
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PowerRating) up 6.24%, retail
(
$RLX.X |
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PowerRating) up 4.09%, and gold
(
$XAU.X |
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Chart |
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PowerRating) up 4.08%. Worst performing sectors were chemicals
(
$CEX.X |
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Chart |
News |
PowerRating)
down 1.45%, networking
(
$XWX.X |
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PowerRating) down 1.33%, and health care providers
(
$RXH.X |
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PowerRating)
down 1.14%.
The VIX
(
$VIX.X |
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Chart |
News |
PowerRating) gapped down, opened near
its highs, and closed near the lows of the day. This shift
in intraday sentiment again shows a big drop in fear. The VIX is now below its
July 29 low and stretched almost 20% below its 10-day moving average. Last
time this happened, the S&P dropped over 7%. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
opened near its highs and closed near its lows. This shift
in intraday sentiment also shows a drop in fear. Once again, we got CVR 3 and 6
sell signals. Yes, complacency is in the air, so it might be a good idea to
tighten stops on any longs.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 33.07 |
DOWN 3.29 |
CVR 3 SELL |
19.79 % Below |
At Extreme |
| VXN | 51.24 |
DOWN 2.04 |
CVR 3, 6 SELL |
14.95 % Below |
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 |
| Nordstroms |
JWN |
+ 11.82 |
970 |
173 |
| Echostar Communications |
DISH |
+ 10.61 |
3864 |
1525 |
| Baker Hughes |
BHI |
+ 10.36 |
12128 |
1010 |
| Interpublic Group |
IPG |
+ 9.08 |
7140 |
1832 |
| Target Corp. |
TGT |
+ 9.10 |
4324 |
1926 |
| Nabors Industries |
NBR |
+ 6.28 |
1908 |
428 |
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 |
| Skywest |
SKYW |
76.9 |
60.8 |
58.9 |
41.8 |
| Associated Banc-Corp |
ASBC |
30.3 |
24.7 |
29.1 |
21.5 |
| Kinder Morgan Managemnet |
KMR |
42.6 |
35.3 |
47.9 |
25.8 |
| Serologics |
SERO |
65.8 |
56.8 |
65.6 |
44.8 |
| Ethan Allen |
ETH |
52.2 |
45.9 |
46.3 |
30.3 |
| St. Paul |
SPC |
63.3 |
55.8 |
65.5 |
24.5 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Clear Channel Comm. |
CCU |
65.6 |
78.9 |
68.4 |
35 |
| El Paso Corp. |
EP |
69.4 |
84 |
145.5 |
31.2 |
| IMS Health |
RX |
39.6 |
47.5 |
46.7 |
30.7 |
| Advanced Auto Parts |
AAP |
42 |
48.6 |
68.8 |
25.4 |
| ProLogis Trust |
PLD |
26.8 |
30.9 |
30.3 |
24.9 |
| America Online |
AOL |
73.1 |
83.7 |
93.2 |
43 |
Please use stops on every trade!