Thursday’s Options Alerts
In today’s session the VIX was
a very well behaved index. You might
recall that yesterday “our children”, the VIX and VXN were starting to
cooperate. On Wednesday, we saw beautiful behavior in the VIX as it tested
levels just outside its trading range highs, and prices not seen since last
October, before reversing back into its trading range.Â
With prices in the SPYs and DIAs also
establishing lows through the 84% Fibonacci level before ultimately reversing,
today’s action with intraday patterns developing off the lows is the type of
confirmation that we like to look for in establishing our positions. Fear in the
air, some of the strongest volume of the year, testing, and reversing of
prices…all of the elements of a great trade. Almost. Let’s not forgot our dear
friend the spread, because no matter how good things look, positions always look
much better when spread, cause as the saying goes, “in order to get ahead,
its best to stay spread”.
We did get a gap higher, and then a rally out the
VIX ensued, before it reversed to close back inside its one and one half month
trading range. Was it extreme action. No, but I could swear I saw some eye
“whites” in my scope as I took a shot at the bear. I’m deep in bear
territory with a vertical in the Diamonds. It’s a swing trade that closed well,
but that could all change very abruptly. The one thing I do know is that I’m
staying spread to stay alive deep in bear territory.
Points of Significance:
Above/Below 10 Day Moving Average
|Â Â Â Â Â Â
|VXN||47.36||Up + .33||Â Â Â Â Â Â
Abnormal Options Volume — This list
includes both percentage movers that are normally associated with an increase in
options activity, as well as stocks that have unusually high activity and / or
reflecting increased speculation of a potential price move.
|Â Â Â Â Â Â Â +2.5%||7649||3134|
|Â Â Â Â Â Â -2%||24367||5391|
|Â Â Â Â Â Â -1%||13012||3776|
|Smith International||SII||Â Â Â Â Â Â -1.5%||5811||765|
Stocks With Spikes in Implied
Volatility — Stocks with Increases and Decreases in implied
volatility compared to previous day. Candidates are then screened qualitatively.
These lists represent those issues that carry a blend of liquidity and/or
technical setups that might deserve further notice.Â
Please use stops on every trade!