Monday’s Options Alerts
The major indices
put in a rally despite some lukewarm economic data. Stocks slipped early
morning after the September durable goods orders came in well below expectations
(-5.9% vs. -1.8%). This was the biggest drop in 10 months, but excluding
transportation, durables fell 1%.
Consumer confidence also slipped a bit despite
the recovery in the stock market. The University of Michigan consumer sentiment
index came in at 80.64 or slightly higher than its preliminary number, but it
was below the expected reading of 81.2. However, the housing market is still
going strong as new home sales for September climbed 0.4% to a 1.02 million
annual rate, this bested the expected 986,000 level.
Lastly, existing home sales
1.9% to an annual rate of 5.40 rate, it bested the 5.37 million rate.
The day
started off in the red after the durable goods numbers and the warning from
Cigna
(
CI |
Quote |
Chart |
News |
PowerRating). However the averages came back to life during the final hour of
trading. At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) gained 126.65 points or 1.52%. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) gained
15.15 points or 1.71% and, the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) was the biggest winner as it gained 32.42 points or 2.49%.
Stocks have now seen three straight weeks of gains following the Oct. 10
bottom. For the week, the Dow gained 121 points or 1.45%. The S&P gained 13
points or 1.47%. The S&P still has yet to decisively close above the 900
resistance level, and the Nasdaq gained 44 points or 3.42%.
Top performing
sectors today were semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) up 5.26%, disk drives
(
$DDX.X |
Quote |
Chart |
News |
PowerRating)
up 4.60%, and broker dealers
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) up 3.18% Worst performing
sectors today were oil services
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) down 5.35%, health care
(
$HMO.X |
Quote |
Chart |
News |
PowerRating) down
1.67%, and natural gas
(
$XNG.X |
Quote |
Chart |
News |
PowerRating) down 0.87%. Once again, we are overbought
and could be due for a pullback, watch the 50-day average for potential.
Volatility took a beating today and hit a month-and-a-half low. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near its highs, and closed
near its low. This shift in intraday sentiment shows a big drop in fear.
The VIX triggered a CVR 6 sell. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) opened near its highs and closed near the lows of
day. This shift
in intraday sentiment also shows a drop in fear. The VXN didn’t
trigger any CVRs today.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 36.27 | DOWN 3.63 | CVR 6 SELL |
8.86% Below | Not At Extreme |
| VXN | 50.39 | DOWN 4.19 | NONE | 7.89% 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 |
| Micron Technology |
MU |
+ 8.12 | 15720 | 5176 |
| Global Sante Fe |
GSF |
– 7.51 | 3343 | 1011 |
| Carnival Corp. | CCL |
+ 5.82 | 1431 | 391 |
| Waste Management |
WMI |
– 5.77 | 13670 | 864 |
| Jabil Circuits | JBL |
+ 5.03 | 5304 | 1271 |
| Patterson Energy |
PTEN |
– 3.46 | 2788 | 673 |
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 |
|
Golden State Bancorp
|
GSB |
16.2 | 11.9 | 35.1 | 10.3 |
| Allied Capital | ALD |
64.5 | 55.9 | 84.2 | 29.3 |
| Alliant Energy | LNT |
59.5 | 51.7 | 50 | 17.7 |
| B.F. Goodrich | GR |
65.8 | 57.6 | 57.5 | 33.1 |
| OM Group |
OMG |
75.1 | 63.3 | 52.6 | 41.1 |
| Unilab | ULAB |
63.4 | 55.7 | 76.5 | 29.7 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
|
Emulex
|
ELX |
78.7 | 102 | 116.9 | 78.8 |
| Electronic Arts | ERTS |
43.7 | 55.4 | 68.4 | 39.2 |
| Household International | HI |
91.4 | 110.9 | 88.7 | 39.3 |
| Dollar Tree Stores | DLTR |
69.8 | 84.1 | 70.6 | 38.3 |
| Sungard Data Systems | SDS |
58.3 | 68.3 | 83.6 | 34.4 |
| Zoran | ZRAN |
83.3 | 97.1 | 99.3 | 65.3 |
Please use stops on every trade!