Friday’s Options Alerts
Stocks sink
once again over mixed economic data, but finished the day off their lows. The
Dow cracked below its 50% retracement from the July 24 low, the S&P bounced
off its 50%, while the Nasdaq appears to be headed toward the 78.6% retracement.
A round of mixed economic data didn’t help either. August same-store sales came
in a bit better than expected, sales grew 1.6%, besting estimates of a 1.5% rise.
The ISM non-manufacturing index dropped to a reading of 50.9% in August, which
was well below expectations of 54.4%. This indicates that the service sector is
barely moving. In a sign that layoffs are continuing, first time jobless claims
increased by 5,250 to 400,000.
At the close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) dropped
141.42 points, or 1.67%, the S&P dropped 14.25 points, or 1.59% and finally,
the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) dropped 41.31 points, or 3.19%. Airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating),
down 6.15%, semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), down 5.13%, biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating),
down 4.56%, and broker dealers
(
$XBD.X |
Quote |
Chart |
News |
PowerRating), down 4.55%, were the weakest
sectors. Gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), up 4.43%, and health care providers
(
$RXH.X |
Quote |
Chart |
News |
PowerRating)
were the sole winning sectors. After the bell, Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) reported that
its third quarter revenues will be near the midpoint of its estimates of $6.3
billion to $6.9 billion. Obviously this was much better than a warning.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near
its midpoint, and closed near the lows of the day. This shift in intraday sentiment
shows a drop in fear. The VIX triggered CVR 1 and 6 buy signals. It looks like
the VIX will start working its way back down. In contrast, the VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
gapped higher, opened near its midpoint, and closed just under its midpoint. This shift
in intraday sentiment also shows a drop in fear. The VXN triggered a CVR 1
buy signal. With the intraday shifts in volatility, we could see some type of
bounce soon.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 42.23 |
UP 2.29 |
CVR1, 6 BUY |
16.30% Above |
At Extreme |
| VXN | 60.72 |
UP 3.30 |
CVR 1 BUY |
14.24 % 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 |
| Take Two Interactive |
TTWO |
+ 8.14 |
3638 |
681 |
| Best Buy |
BBY |
+ 7.84 |
8159 |
3716 |
| Intel |
INTC |
– 6.20 |
129333 |
24609 |
| Paychex |
PAYX |
– 4.07 |
1186 |
304 |
| Household International |
HI |
– 3.02 |
12219 |
6015 |
| Medtronic |
MDT |
– 2.66 |
4892 |
2326 |
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 |
| Arthur J. Gallagher |
AJG |
41.5 |
34.1 |
40.3 |
22.9 |
| CSX |
CSX |
41.1 |
34.4 |
39.1 |
30.6 |
| Pixar |
PIXR |
43.7 |
37.7 |
43.6 |
30.7 |
| Avery Dennison |
AVY |
34.9 |
30.5 |
39.4 |
21.7 |
| McDonalds |
MCD |
43.5 |
38.1 |
38.5 |
21.2 |
| FedEx |
FDX |
40.1 |
35.8 |
47.8 |
25.9 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Financial Sector SPDRs |
XLF |
22.4 |
27.1 |
37 |
13.6 |
| AT&T Canada |
ATTC |
17.9 |
21.1 |
38.5 |
17.3 |
| Countrywide Credit |
CCR |
42.4 |
47.2 |
54.2 |
24.9 |
| Hershey Foods |
HSY |
35.7 |
39.3 |
38.5 |
16.1 |
| Vencor |
VC |
42.8 |
47 |
47.1 |
32.7 |
| Albertsons |
ABS |
37.8 |
41.5 |
40.1 |
22.7 |
Please use stops on every trade!