Thursday’s Options Alerts
The ETFs took the early plunge
as multiple downgrades and uninspiring earnings
outlooks have become quite fashionable during the past two days. Most
of the damage was inflicted upon the sectors that have treated the broader
averages so well during the past several weeks. The only respite from today’s
carnage was in the defensive issues that took the offensive for the first time
in a long while. Today’s closing prices makes it 3 for 3 as far as the indices are concerned, as
they pull back from their recent highs, but unlike baseball, were not out of the
game just yet.
All of the ETFs, as implied, closed down on the
session, but despite the sea of red in the markets today, the damage sustained
still had the ETFs swimming “up the channel.” Technically, all of the ETFs, and even the Semiconductor HOLDRs
(
SMH |
Quote |
Chart |
News |
PowerRating)
held their respective uptrend channel lines drawn in from the Oct. 11 bullish gap lows to the
Nov. 11 or 13 lows, depending on which one you’re focused on.
Trendline analysis can be somewhat subjective, and I like to find points, such
as Oct.
11, that intuitively make sense, but are not exactly the “bottom or
top.” I guess for the mathematicians out there this is akin to a best fit
line, but in this case I’m using it to find support along the bottom of a trend.
I mentioned the channel yesterday and thought it was appropriate to follow up
after today’s action.
The
volatility indices
(
$VXN |
Quote |
Chart |
News |
PowerRating) and
(
$VIX |
Quote |
Chart |
News |
PowerRating) were up today and closed well
enough to produce CVR buy signals. As you
know, closing well enough in the volatility indices to produce buy signals,
means that it’s potentially time to start thinking about buying the ETFs, as
fear is rearing its ugly head.
This is my interpretation, because my first
priorities for entering a trade are price and volume within the underlying
security, and the CVR signals or my own personal interpretation of volatility
levels are secondary in the decision process. Today’s buy signals are confirming
my potential support levels within the ETF’s. With that said, it’s
“awareness time,” time to prepare for battle, and ready to execute,
should confirmation happen tomorrow.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 32.14 | Up +.38 |
CVR1Buy |
9.13% Above |
Not at Extreme |
| VXN | 53.55 | Up +1.56 | CVR1,3Buy |
11% Above | At an 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.
Sorry, due to technical problems no individual
alerts are available this evening.
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.
Sorry, due to technical problems no individual
alerts are available this evening.
Please use stops on every trade!