Monday’s Options Alerts

Stocks reversed

course after some early morning weakness brought on by lukewarm economic data
.

The major indices put in a broad-based rally in the face of economic data
showing a somewhat stabilizing job market and declining consumer and business
spending. Unemployment came in slightly better than expected at 5.7% vs. expectations
of 5.8%, but nonfarm payrolls came in at -5K while economist were calling for a
gain of 5K. Meanwhile consumer spending took the biggest dip in 10 months as
personal spending for September dipped 0.4% or more than the 0.2% loss
expected. And finally, the October ISM index declined to 48.5 from
September’s 49.5, slightly lower than the expected reading of 48.9%.

At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
gained 120.61 points or 1.43%. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
gained
15.20 points or 1.71% and the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating)
gained 30.96 points or
2.32%. Stocks have now made it to four straight weeks of gains. For the week,
the Dow gained 74 points or 0.87%, the S&P gained roughly 3 points or 0.33%,
and the Nasdaq gained 29 points or 2.18%.

The market’s reaction to the data
today was indeed bullish and today’s move puts the major indices near the highs
of the recent trading range. With the S&P closing above 900, the next
resistance would be the 78.6% retracement at 922.97. Surprisingly, there were no
losing sectors today.

Tech sectors saw the most action, the top winners: networking
(
$NWX.X |
Quote |
Chart |
News |
PowerRating)

up 8.13%, semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)
up 6.06%, Internets
(
$INX.X |
Quote |
Chart |
News |
PowerRating)
up
5.53%, and oil services
(
$OSX.X |
Quote |
Chart |
News |
PowerRating)

up 5.07%, and gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating)
up 4.68%.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)
took a beating today and fell to a two-month low. The
VIX opened near its highs and closed near the
lows of the day. This shift in intraday sentiment still shows a decrease in
fear.
The VIX did not trigger any CVR signals. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
displayed the same action as the VIX, it didn’t trigger any
CVRs either. .

Points of Significance:

Volatility
Index
Close Net
Change
Signals/Direction %
Above/Below 10 Day Moving Average
Significance
VIX 33.98 DOWN 1.93 NONE
8.70% Below Not At
Extreme
VXN 49.86 DOWN 3.13 NONE 4.37% 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
Aon Corp.
AOC
– 9.21 3157 822
Halibutton
HAL
+ 5.68 11696 3793
Watson Pharmaceuticals
WPI
+ 3.09 1933 203
Activision
AVTI
+ 2.92 2868 807
Deutsche Bank
DB
+ 2.12 2849 470
MayTag
MYG
+ 0.93 1717 328

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

Saks


SKS
65.8 54.9 61.4 35.7
H.R. Block
HRB
53.8 45.8 64.2 32
Astrazeneca
AZN
48.9 42.8 60.9 32.3
Andrx
ADRX
97.9 85.8 140 80.3
Overture
OVER
80.4 72.6 106.9 73.6
Tenet Healthcare
THC
89.8 81.6 48.8 25.1

Spike Down

Name Symbol IV Previous
IV
High
IV
Low
IV

Stericycle


SRCL
46.7 62 73.1 37
Gilead Sciences
GILD
49.2 62.7 87.8 56
Healthcare
HCA
44.6 53.2 43.7 21
CIGNA
CI
56.5 66.8 52.7 27.4
United Group
UNH
35.2 41.2 48.9 26.5
Lifepoint Hospitals
LPNT
51.1 59.1 69.1 38.7

Please use stops on every trade!