Friday’s Options Alerts
The indices opened
sharply lower, but they quickly recovered the lion’s share of their losses. Both
the Dow and S&P ended the day slightly lower while the Nasdaq ended modestly
higher. At the close,
the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
dropped 23.10 points or 0.26% after having fallen 136 points earlier today. The Dow
did back off after hitting resistance at its 50-day moving average. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
finished the day with a loss of only 0.07 points after being lower by 10 points
earlier. The Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) bounced back from recent losses as it gained
21 points or 1.62%. The Naz put in a nice outside day key reversal bar,
but it still remains under a trendline from its August 5 lows.
Once again,
volume was below average, and some of the action could be attributed to end-of-the-month window dressing. Internets
(
$INX.X |
Quote |
Chart |
News |
PowerRating) up 4.70%, were the best-performing sector today after Merrill Lynch
(
MER |
Quote |
Chart |
News |
PowerRating) upgraded Yahoo!
(
YHOO |
Quote |
Chart |
News |
PowerRating).
Worst performing sectors were oil service
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) down 1.71% and
transportation
(
$TRANX.X |
Quote |
Chart |
News |
PowerRating) down 1.57.
On the economic front, the revised
second quarter GDP numbers were left unchanged at 1.1% — expectations were calling
for 1.2%. Weekly initial claims rose by 8,000 to 403,000. This was the first
week in seven that it rose above the 400K mark. Tomorrow we have the revised
August Michigan sentiment and the Chicago PMI on tap.
Volatility shot up in a show of rising fear. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near
its lows, and closed near the highs of the day. This shift in intraday sentiment
again suggests a rise in fear. A CVR 3 sell signal was triggered today. Although
still early, we’re getting close to oversold levels already. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
also gapped up, opened near the lows, and closed in the lower half of its
range. This shift
in intraday sentiment also shows a rise in fear. The VXN didn’t trigger any CVRs.
Points Of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 36.32 |
UP 0.09 |
CVR 1 BUY |
10.10 % Above |
At Extreme |
| VXN | 55.05 |
UP 1.53 |
CVR 1 BUY |
12.10 % Above |
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 |
| Michaels Stores |
MIK |
+ 13.79 |
953 |
266 |
| Apollo Group |
APOL |
+ 9.78 |
1227 |
561 |
| Kroger |
KR |
– 5.94 |
5802 |
974 |
| Scientific Atlanta |
SFA |
+ 5.55 |
2928 |
779 |
| Bristol Myers Squibb |
BMY |
– 3.07 |
18665 |
5967 |
| Neoware Systems |
NWRE |
– 2.51 |
1435 |
338 |
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 |
| Allied Capital |
ALD |
69.2 |
54.4 |
84.2 |
27.2 |
| Neoware Systems |
NWRE |
97.6 |
84.8 |
93.1 |
90.9 |
| Reebok |
RBK |
47.9 |
42 |
50.1 |
32.7 |
| AT&T Canada |
ATTC |
24.6 |
21.8 |
41.2 |
17.3 |
| Kroger |
KRX |
40.4 |
36.1 |
41.2 |
23.1 |
| Flemings Cos. |
FLM |
110.6 |
99.9 |
98.2 |
50.9 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Michaels Stores |
MIK |
48.4 |
59 |
63.1 |
33 |
| Chico’s FAS |
CHS |
57.3 |
68.3 |
80.5 |
39.1 |
| Questar |
STR |
26.9 |
31.5 |
43.5 |
22.4 |
| Apollo Group |
APOL |
43.6 |
50.8 |
58.3 |
33 |
| Western Resources |
WR |
51.3 |
58.1 |
51.6 |
23.5 |
| PetsMart |
PETM |
51.9 |
58.1 |
57.8 |
37.5 |
Please use stops on every trade!