Monday’s Options Alerts
The selling accelerated on this
Triple Witching Friday as concerns of the plunging dollar (now at a two-year low), more
accounting worries, and increased tension in the Middle East weighed heavily on
the markets. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) and Nasdaq Composite
(
$COMPX |
Quote |
Chart |
News |
PowerRating)
are closing in on their September lows, while the Nasdaq 100
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) is
again below it. This was the fifth consecutive week of declines for the major
indices. The was a huge absence of buyers today. The only sectors in the green
were REITs and utilities. Tech issues, especially networkers, were weak despite a
positive announcement from Qualcomm
(
QCOM |
Quote |
Chart |
News |
PowerRating). For more information on today’s action, please refer to
the market
recap.
Despite the sharp sell-off today it
was surprising to see volatility go down. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened
near its highs and closed in the lower third of its range. This shift
in intraday sentiment actually shows a decrease in fear. The VIX triggered CVR
1 and 2 buys today. On the other hand, the VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped up,
opened near its lows, and closed
near the highs of the day. This shift in intraday sentiment shows a rise in fear. The VXN didn’t trigger any signals
today.
Points of Significance:
Intuit
(
INTU |
Quote |
Chart |
News |
PowerRating) dropped 6% on more
than double its average volume. The shares came under pressure today after
the company lowered its fiscal 2002 earnings estimates due to the proposed sale
of its home loans unit. Intuit was down almost 10% at one point, but recovered
somewhat and closed near its 20-day moving average.
THQ Inc.
(
THQI |
Quote |
Chart |
News |
PowerRating)
dropped 6% on heavy volume. The shares are starting to break down from a head-and-shoulders. There is heavy activity in the July 25 puts.
America Online
(
AOL |
Quote |
Chart |
News |
PowerRating) dropped
almost 6% on heavy volume. The shares have now broken down to a level not seen
since November of 1998. There appears to be symmetry to AOL’s decline as the
last two downlegs after the countertrend rallies have been around five points
each.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 31.28 | DOWN 1.22 |
CVR 1, 2 BUY |
8.76 % Above |
Not At Extreme |
| VXN | 59.30 | UP 1.37 |
NONE | 7.72 % Above |
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 |
| Intuit | INTU | – 6.43 |
4721 | 332 |
| FreeMarkets | FMKT | – 15.09 |
3051 | 147 |
| Fairchild Semiconductor |
FCS | – 8.05 |
1826 | 143 |
| Microchip Tech. |
MCHP | – 6.24 |
7778 | 527 |
| THQ Inc. |
THQI | – 6.06 |
4551 | 152 |
| America Online |
AOL | – 5.87 |
29022 | 5555 |
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 |
| Pacific Century Financial |
BOH | 42.5 | 18.7 | 31.4 | 19.3 |
| Worthington Industries |
WOR | 39.5 | 30.3 | 38.8 | 28.3 |
| International Rectifier |
IRF | 83.7 | 67.9 | 64.3 | 43.8 |
| Digene | DIGE | 105 | 85.4 | 75.8 | 40.2 |
| King Pharmaceuticals |
KG | 58.6 | 47.7 | 59.1 | 35.2 |
| Black Box |
BBOX | 56.1 | 46.5 | 62.4 | 41.1 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Dreyers Brand Ice Cream |
DRYR | 12.5 | 20.1 | 33.8 | 31.6 |
| Cognos | COGN | 63.8 | 78.3 | 60.8 | 38.5 |
| Belo | BLC | 25.5 | 30.2 | 37.7 | 29.7 |
| Basic Industries SPDRs |
XLB | 24 | 28.4 | 29 | 16.8 |
| Financial Sector SPDRs |
XLF | 38.4 | 34 | 38.9 | 30.4 |
| Ryder Systems |
R | 30.7 | 35.1 | 35.5 | 30.1 |
Please use stops on every trade!