Monday’s Options Alerts
The sell off accelerated
today amid more warnings, credit downgrades and mixed economic data.
All three indices
saw green at the start of the session, but soon selling pressure resume as
warnings from EMC
(
EMC |
Quote |
Chart |
News |
PowerRating) and Schering Plough
(
SGP |
Quote |
Chart |
News |
PowerRating) along with credit
downgrades of Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating) and Walt Disney
(
DIS |
Quote |
Chart |
News |
PowerRating) overcame buyers.
Tuesday’s
huge rally turned out to be a one-day wonder as the major averages have been
down for the past three sessions and have already erased all gains from Tuesday.
At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) dropped 188.38 points or 2.44%. The Dow has now
closed below the July 24 lows. Meanwhile the S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) fell
18.36 points or 2.24%.
Although the S&P hasn’t taken out its July lows, it
is near its May 1997 levels. The Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) dropped 25.64 points or
2.19%.The Naz’s two prior down legs were approximately 175 points, therefore
it’s probable that the index will head towards 1061 before a tradable rally.
This marks the sixth straight week of declines for the major averages.
For the
week, the Dow fell 173 points or 2.24%, the S&P dropped 23 points or 2.08%,
and the Naz dropped 60 points or 5%. Retailers
(
$RLX.X |
Quote |
Chart |
News |
PowerRating) up 0.96% and gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) up 0.56% were the only winning sectors of the day. Losers were
computer hardware
(
$GHA.X |
Quote |
Chart |
News |
PowerRating) down 6.70, healthcare
(
$HMO.X |
Quote |
Chart |
News |
PowerRating) down
4.50%, biotech
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) down 4.30%, and utilities
(
$UTY.X |
Quote |
Chart |
News |
PowerRating) down
3.98%. Reports of the job market came in mixed today as the unemployment rate
slipped to 5.6% in September from August’s 5.7%. This was a positive as
economists were looking for a rise to 5.9%. However, non-farm payrolls fell by
43,000 vs. a projected increase of 13,000.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped down, opened near its lows, and closed near the
midpoint of its range. This shift in intraday sentiment shows a rise in fear.
Again , no CVRs were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened
near its lows and closed near its midpoint. This shift
in intraday sentiment also shows a rise in fear. Volatility rose again
today, but is not near any extremes. We probably need to see the VIX with
readings in upwards of 60 before some kind of sustainable bounce.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 46.28 | UP 1.32 | NONE | 6.37% Above | Not At Extreme |
| VXN | 60.28 | UP 2.07 | NONE |
2.41% 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 |
| Laboratory Corp. |
LH |
– 34.65 | 1838 | 608 |
| Texas Utilities |
TXU |
– 17.81 | 2696 | 661 |
| Qlogic | QLGC |
– 15.08 | 25122 | 10612 |
| Qwest Dianostics |
DGX |
– 11.11 | 3751 | 817 |
| IDEC Pharmaceuticals | IDPH |
– 7.35 | 13438 | 3434 |
| Vertex Pharmaceuticals |
VRTX |
– 4.40 | 1011 | 107 |
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 |
|
Laboratory Corp.
|
LH |
74.9 | 51.9 | 78.4 | 26.4 |
| Sigma Aldrich | SIAL |
49.4 | 36.4 | 46 | 27.6 |
| Comerica | CMA |
47.8 | 35.8 | 41.5 | 17.3 |
| Corinthian Colleges | COCO |
70.1 | 53.4 | 76.4 | 35.6 |
| Progress Energy | PGN |
40.2 | 31.6 | 33.8 | 14.5 |
| United Parcel Service | UPS |
32.3 | 25.5 | 30.3 | 11.5 |
| Bemis | BMS |
38.7 | 30.8 | 32.6 | 20.7 |
| Apollo Group | APOL |
59.7 | 48.1 | 58.3 | 33 |
| Investor Financial Services | IFIN |
67.2 | 54.6 | 59.2 | 27.8 |
| Abott Labs | ABT |
54.9 | 45 | 48.1 | 23.5 |
Spike Down
None Today
Please use stops on every trade!