Thursday’s Options Alerts
Stocks got a
boost today after the Fed cut rates by a surprise 0.50 points. It was
the first cut since last December and today’s move brought the fed funds rate to
1.25%. The major averages drifted higher in the morning after the news of Harvey
Pitt’s resignation and Republicans’ sweep of Congress.
Oils
(
$OSX.X |
Quote |
Chart |
News |
PowerRating),
drugs
(
$DRG.X |
Quote |
Chart |
News |
PowerRating), and defense
(
$DFI.X |
Quote |
Chart |
News |
PowerRating) benefited from the news. Volatility
increased after the announcement as the averages shot up, then down, then
finally up. At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) gained 92.74 points or 1.06%. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) gained
8.37 points or 0.91% and the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) gained 17.80 points or
1.27%.
All three indices have already broken through their respective 78.6% retracements and their next stop could be the August highs. Today’s cut launched
a broad-based rally with the top winning sectors being: airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating) up
12.16%, oil services
(
$OSX.X |
Quote |
Chart |
News |
PowerRating)
up 4.10%, healthcare
(
$HMO.X |
Quote |
Chart |
News |
PowerRating) up 3.95%,and semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) up
3.87%. The only losing sectors today were: banks
(
$BIX.X |
Quote |
Chart |
News |
PowerRating) down 1.13%,and
biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) down 0.40%.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near its top half and closed near the
lows of the day. This shift in intraday sentiment still shows a drop in
fear.
The VIX triggered a CVR 2 sell signal today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near its highs, and closed near the lows
of the day. The Vixen also triggered a CVR 2 sell.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 34.48 | UP 0.20 | CVR 2 SELL |
3.63% Below | Not At Extreme |
| VXN | 50.06 | DOWN 1.14 | CVR 2 SELL |
2.51% 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 |
| Georgia Pacific | GP |
+ 12.14 | 11214 | 1965 |
| Computer Associates |
CA |
+ 6.62 | 25062 | 1915 |
| Eli Lilly | LLY |
+ 4.38 | 14126 | 5176 |
| Bristol Meyers Squibb |
BMY |
+ 4.32 | 11443 | 3408 |
| Nabors | NBR |
+ 3.68 | 9981 | 808 |
| CV Therapeutics |
CVTX |
+ 2.97 | 8411 | 1743 |
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 |
|
North Fork Bancorp
|
NFB |
36.1 | 29.7 | 37.7 | 16.7 |
| Amgen | AMGN |
49.5 | 41.8 | 73.3 | 38.8 |
| York International | YRK |
43.4 | 37.2 | 43.5 | 28.6 |
| Trinity Labs | TRN |
65.1 | 56.8 | 51.5 | 38.4 |
| Investment Tech Group |
ITG |
34.5 | 56.7 | 59 | 38.1 |
| Moody’s Corp. | MCO |
41.4 | 36.5 | 43 | 25 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
|
Marshall Industries
|
MI |
27.5 | 34.3 | 40.9 | 17.6 |
| Abott Labs | ABT |
29 | 34.8 | 48.6 | 25.9 |
| Charles River Labs | CRL |
49.8 | 59.3 | 57.8 | 36.1 |
| Haliburton | HAL |
75 | 89.1 | 94.7 | 49.8 |
| AmerisourceBergen | ABC |
36.7 | 41.9 | 58.6 | 27.5 |
| Ball Corp. | BLL |
39.8 | 45.3 | 60.6 | 31.3 |
Please use stops on every trade!