Monday’s Options Alerts

• May 31, 2002
• TradingMarkets Editors

Stocks put in a good rally after a
plethora of positive economic data, but the window dressing did not last. The
Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) and S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) ended the day with minor gains,
while the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) dropped almost 1%. The
Chicago Purchasing Managers index rose to a three-year high reading of 60.8, up from
April’s reading of 54.7. Consumer sentiment was also better, as the Michigan’s
consumer sentiment index jumped to 96.9, up from 93 in April. Also, manufacturing
activity continues to increase as factory orders rose 2.4%. In a report that
continues to suggest a rebound in the semiconductor industry, the Semiconductor
Industry Association reported a 3.1% increase in worldwide chip sales. Chip
stocks, which were higher during the day, fell 0.88% by the close. For more information on today’s action, please refer to
the market
recap.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened
near its high and closed near the midpoint of its range. This shift
in intraday sentiment shows a decrease in fear. No CVR signals were triggered
today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) had an inside day today. It opened near its highs
and closed just near the midpoint of
its range. This shift intraday also shows a decrease in
fear. No CVR signals were triggered by the VXN either. Fear did die down today
on the back of the economic reports. However, the markets did gave back the
lion’s share of the day’s gain to close near the lows of the day.

Points of Significance:

Bristol-Myers Squibb
(
BMY |
Quote |
Chart |
News |
PowerRating) jumped
over 4% only slightly higher than average volume. The shares were boosted today
after the New York Times reported that the company is in talks with
GlaxoSmithKline
(
GSK |
Quote |
Chart |
News |
PowerRating) about a possible merger. Shares of Bristol Myers have
lost almost 50% of their value after setbacks with its cancer drug and profit
warnings. The stock gapped up sharply, but closed weak. Implied volatility is
also somewhat low.

Whole Foods Market
(
WFMI |
Quote |
Chart |
News |
PowerRating)
gained 3% on double its average volume. The stock has gained more than 70% since
its September low. Whole Foods also hit a new 52-week high. There is heavy
activity in the August 50 calls.

Research In Motion
(
RIMM |
Quote |
Chart |
News |
PowerRating)
gained 3% on triple its average volume after dropping as much as 9% earlier in
the day. Research In Motion initially fell in sympathy with Palm Inc.
(
PALM |
Quote |
Chart |
News |
PowerRating)
after they announced that their fourth quarter sales will be 22% below their
previous forecasts. Shares of RIMM did hit a new 52-week low, but has backed off
that level.

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!