Monday’s Options Alerts

  • September 27, 2002
  • TradingMarkets Editors

Warnings and
downgrades overpowered the slightly better-than-expected economic data.
Stocks
were pressured from the start as news of Phillip Morris’
(
MO |
Quote |
Chart |
News |
PowerRating) warning, job
cuts at SBC Communications
(
SBC |
Quote |
Chart |
News |
PowerRating), and another downgrade of General Electric
(
GE |
Quote |
Chart |
News |
PowerRating) kept blue chips down. Tech stocks fared better early on, but soon caved
into the selling pressure. Even slightly positive reports from the economic
front couldn’t hold off the selling pressure. 

The second quarter GDP showed a
1.3% growth in the economy (upwardly revised from 1.1%) thus topping estimates
of a 1.2% gain. Consumer sentiment also declined less than expected as the
September University of Michigan’s consumer sentiment index rolled back to 86.1
from 87.6. This was just a tad better than the 86 reading predicted by
economists. 

At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) dropped 295.87 points or 3.69%, giving back the
lion’s share of this week’s rally. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) fell
27.59 points or 3.22%. And the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) dropped 22.53 points or
1.84%. Both the Dow and S&P fell for the fifth straight week with the Dow
giving up 285 points or 3.57% and the S&P gave back just 12 points or 1.43%.
The Nasdaq fell just 22 points for the week or 1.8%.Healthcare
(
RXH.X |
Quote |
Chart |
News |
PowerRating)
up 0.59% was the best-performing issue today. The worst-performing sector
was airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating) down 9.72.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near the lower third of its range and closed
near the highs of the day. This shift in intraday sentiment
shows a rise in fear. A CVR I sell signal was triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened
near its highs and closed slightly below its open. This shift
in intraday sentiment shows a drop in fear. Once again, the
vixen didn’t trigger any signals.

Points of Significance:

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 43.14
 		UP 3.02
 		CVR
I SELL

 0.003% Above
 		Not At Extreme
VXN 57.86
 		DOWN 1.23
 		NONE
 2.28% Below
 		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
4 Kids Entertainment
 		KDE

 + 10.77
 		1718
 		274
Marvell
Technology
 		MRVL

 – 10.61
 		4140
 		1876
Barrick Gold
 		ABX

 – 10.52
 		8383
 		2672
Wendy’s
International
 		WEN

 + 5.89
 		1431
 		303
Nabors
 		NBR

 + 5.21
 		3129
 		555
H&R
Block
 		HRB

 – 5.01
 		18970
 		3663

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

Nautilus Group

NLS

 99.5
 		77.6
 		82.1
 		57.5
Copart
 		CPRT

 104.5
 		70.5
 		55.3
 		40.5
Chubb Corp.
 		CB

 45.5
 		39.3
 		49.6
 		27
Office Depot
 		ODP

 56.7
 		49
 		60.8
 		31.8
Medimmune
 		MEDI

 86.2
 		75.5
 		108.8
 		54.6
Fortune Brands
 		FO

 34.9
 		30.6
 		35.8
 		18.5

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
Electronic Data Systems
 		EDS

 92.7
 		105.6
 		87.9
 		32.3
Hyperion Solutions
 		HYSL

 74.9
 		84.6
 		70.3
 		45.3
Annaly Mortgage
 		NLY

 53.4
 		59.5
 		56.2
 		36.1
Wyeth
 		WYE

 51.2
 		56.3
 		66.7
 		17.2
Stericycle
 		SRCL

 49.7
 		54.6
 		73.1
 		37
Cognos
 		COGN

 71.6
 		78.2
 		75.4
 		47

Please use stops on every trade!