Thursday’s Options Alerts

After the huge run
up of the last four sessions, stocks finally pulled
back today. While yesterday’s jump was inspired by positive
earnings news from a number of blue-chip companies, today’s decline was inspired
by negative earnings and warnings from the likes of Intel
(
INTC |
Quote |
Chart |
News |
PowerRating)
, Boeing
(
BA |
Quote |
Chart |
News |
PowerRating)
,
Motorola
(
MOT |
Quote |
Chart |
News |
PowerRating)
, Capital One
(
COF |
Quote |
Chart |
News |
PowerRating)
, and Coca-Cola
(
KO |
Quote |
Chart |
News |
PowerRating)
.

The
fact that the Dow ran up over 1,000 points in the last four days also
suggested that a pullback was needed. At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
gave up 219.65 points or 2.66%. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
fell
21.31 points or 2.41% and, the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating)
fell 50 points or 3.90%.

Semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)
down 8.82%, computer technology
(
$XCI.X |
Quote |
Chart |
News |
PowerRating)

down 7.16%, netwokers
(
$NWX.X |
Quote |
Chart |
News |
PowerRating)
down 6.70% were the biggest losing sectors
of the day on the heels of the Intel and Motorola news. Meanwhile insurance
(
$IUX.X |
Quote |
Chart |
News |
PowerRating)

up 5.66%, Internets
(
$GIN.X |
Quote |
Chart |
News |
PowerRating)
up 5.16%, and banks
(
$BIX.X |
Quote |
Chart |
News |
PowerRating)
up 5.06
continued to run.

There will be lots of economic news on tap for tomorrow: September building permits, September housing starts, initial
jobless claims, September capacity utilization, and September industrial
production. It could be a volatile day.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)
gapped up, opened near its lows, and closed near the
highs of the day. This shift in intraday sentiment shows a rise in fear. We have a CVR
2 sell for today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
also
gapped up, opened near its highs, but closed near
the lows of the day. This shift
in intraday sentiment shows a drop in fear.

Points of Significance:





Volatility
Index

Close

Net
Change

Signals/Direction

%
Above/Below 10 Day Moving Average

Significance

VIX
41.97 UP 2.23
CVR
2 SELL
6.88% Below Not
At Extreme

VXN
56.87 UP 0.50 CVR
2 SELL

4.83% 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
Best Buy

BBY
– 11.15 14454 3402
Coca-Cola
KO
– 10.06 14588 2967
Mercury Interactive
MERQ
– 5.78 4437 1874
A.G.
Edwards

AGE
– 3.12 1098 347
Kraft Foods
KFT
– 3.26 3667 948
St. Jude
Medical

STJ
– 3.72 3356 446

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

Harris


HRS
59.8 44.2 52.3 37.6
Yellow Corp.
YELL
88 65.7 88.1 41
Nike
NKE
43.6 33.5 54.5 28.9
Plantronics
PLT
67.8 52.6 57.9 36.9
Meredith
Corp.

MDP
36.1 28.5 35.2 22.9
Greater Bay Bancorp
GBBK
69.1 56 69.7 31.7

Spike Down


Name

Symbol

IV

Previous
IV

High
IV

Low
IV

Golden State Bancorp


GSB
12.2 28.5 35.1 10.3
Citigroup
C
46.7 59.6 65 27.9
General Motors
GM
66 81.7 76.5 27.4
Parker Hannifin
PH
42.3 51.4 47.6 27.4
Hilton Hotels
HLT
58.4 69.1 68.1 32.7
Federal National Mortgage
FNM
39.3 48.5 52.1 19.7

Please use stops on every trade!