Thursday’s Options Alerts
In Wednesday’s session, guiding
investors expectations lower seemed to be the standard. Starting
with Micron dropping a “bomb,” with numbers well below
consensus, the averages were left in the red for the second day in a row.
Also forcing the issue as to whether the ETFs can maintain their uptrends from
the October lows were Blockbuster and Federal Express. Both companies issued
lower guidance early today, and with more of the usual geopolitical pressures on
the markets the indices notched a day of distribution.
With today’s price pressure on the ETFs, testing
of recent supports occurred at the lows of the day. These price supports are
within our current trading range, which the bull and bears have been wrestling
in for the past week and a half. There was more selling, and distribution was
acknowledged, but it was not necessarily a decisive victory for the bears. As
said, the consolidations remain intact. This doesn’t include the semiconductors,
which as a sector, are off on their own, as they have broken the above mentioned
price supports. Since volatility in the price action of the semis runs just a
tad higher than the major ETFs this is not unusual action, but keep a close eye
out. Further breach will most likely be a harbinger of lower prices for the
SPYs, DIAs, and QQQs, which as you know are already doing their own balancing
act.
The
(
$VIX |
Quote |
Chart |
News |
PowerRating) and the
(
$VXN |
Quote |
Chart |
News |
PowerRating) both finished the session higher, with the VXN
producing a sell signal. Keep it tight,
just like the current trading range, as prices will soon resolve themselves. My
personal bias is still unchanged from last night. I remain on guard, and will be
quick to act when the Generals come calling.
Have a good evening.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 32.14 | Up +2.00 |
No Signals |
On Moving Average |
Not at Extreme |
| VXN | 49.60 | Up +1.46 | CVR II Sell |
3.1% Below | Not at Extreme |
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,
reflecting increased speculation of a potential price move.
| Name | Symbol | Net % Change |
Volume | Avg. Volume |
| Nike | NKE |
-2% |
7676 | 819 |
| Omnicom | OMC |
+2% | 2496 | 1144 |
| Krispy Kreme |
KKD |
-4% | 2739 | 398 |
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.
Spike Up
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| JP Morgan |
JPM |
50 | 44.5 | 84.6 | 29.4 |
| Lexmark | LXK | 48.8 | 44.8 | 62.5 | 33.8 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Electronic Arts |
ERTS |
49.2 | 90.3 | 68.4 | 37 |
| Pinnacle West |
PNW | 28.7 | 33.2 | 82.3 | 14.2 |
Please use stops on every trade!