Friday’s Options Alerts…

• January 17, 2002
• TradingMarkets Editors

Stocks recovered the
majority of their losses today after yesterday’s sell-off. The major
market averages were boosted by a string of positive earnings from companies
such as United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating), General Electric
(
GE |
Quote |
Chart |
News |
PowerRating), Citigroup
(
C |
Quote |
Chart |
News |
PowerRating),
Compaq Computer
(
CPQ |
Quote |
Chart |
News |
PowerRating), Apple Computer
(
AAPL |
Quote |
Chart |
News |
PowerRating), and Yahoo
(
YHOO |
Quote |
Chart |
News |
PowerRating).
Positive economic data also helped the marke, as weekly jobless claims fell by
14,000 to 384,000 versus the expected 441,000. This is the lowest level since
July. For more information
on today’s action, please
refer to the market
recap. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near its highs for the day and closed
right on its lows.
This intra-day shift in sentiment
suggests that fear is declining. No new CVR signals were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
opened near its high and closed near the lows of the day. This intra-day shift in sentiment
also suggest that fear is decreasing. The VXN did not trigger any signals
today either. Both volatility indices are showing that fear is declining, as
investors are cheering today’s earnings and economic data.

Points of Significance:

McAfee.com
(
MCAF |
Quote |
Chart |
News |
PowerRating) tumbled 28% on
almost 24 times its average volume. The shares did bounced slightly off its lows
after hitting the .618 retracement from its September low. Despite easily
beating analysts earnings estimates, concerns arose about a one time $1.6
million boost to its revenues. There is heavy activity in the February 30
and 35 calls, as well as the February 30 puts.

Numerical Technologies
(
NMTC |
Quote |
Chart |
News |
PowerRating) dropped 44% on
over 11 times its average
volume. The shares have now lost over 50% of their value in the last eight trading sessions.
The company provided guidance to its fourth quarter and full year 2002 earnings.
Numerical now expects 4th quarter earnings of 4 cents per share versus analyst
estimates of 6 cents and full year of 22 cents versus estimates of 30 cents.
There is heavy activity in the April 15, 17.50, 20, 22.50, and 25 puts.

Intermune
(
ITMN |
Quote |
Chart |
News |
PowerRating) jumped 13% on over four
times its average
volume. Today the company announced the status of the trial of their idiopathic
pulmonary fibrosis drug, Actimmune. The Data Safety Monitoring Board (DSMB)
recommended that Intermune continued their Phase III clinical trial of Actimmune.
The company is confident that the trial would be completed in August and results
from the trial will be released by November.

Implied Volatilities for Tyco International
(
TYC |
Quote |
Chart |
News |
PowerRating)
and Energy East
(
EAS |
Quote |
Chart |
News |
PowerRating) are getting high. Continue to monitor the volatilities
for possible short volatility or directional plays.

Abnormal Options Volume With Price Movement
— Abnormal options volume (calls and puts) with stock price movement

Stocks With Biggest Spikes in Implied
Volatility — Stocks with biggest increases or decreases in implied
volatility compared to previous day

Spike Up

Spike Down

Please use stops on every trade!