Tuesday’s Options Alerts
The major indices
got off to a very positive start this week
as the Dow, S&P, and Nasdaq all
smashed through resistance levels at their 50-day moving averages. Stocks
were strong from the get-go and never really looked back after Lowes
(
LOW |
Quote |
Chart |
News |
PowerRating)
reported better-than-expected second0quarter results and pointed to a rosy third
quarter.
Not even news that the July LEI number declined for the third straight
month could stop today’s rally. The index of leading economic indicators
declined by an expected 0.4%.
Although volume was a little
on the light side, the indices still put in a solid performance.
At the close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) gained 212.87 points or 2.42%, S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) jumped 22 points or 2.36%, and the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating)
gained 33.67 points or 2.47%.
For you Landry followers, the moving averages on all the major indices are
coming together in proper order and could be setting for a Bowtie soon. Today’s
rally was broad-based with software
(
$GSO.X |
Quote |
Chart |
News |
PowerRating) up 4.88%, Internet
(
$DOT.X |
Quote |
Chart |
News |
PowerRating)
up 4.63%, and semiconductor
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) up 4.42%. The only sectors that
didn’t join the party were gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) down 4.48% and biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating)
down 2.03%.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near its highs, and spent the day working its way lower to close near the lows of the day. This shift
in intraday sentiment once again shows a big drop in fear. We have another
repeat CVR 3 sell
plus a CVR 6 sell signal. The VIX is continuing to signal complacency and an
overbought market. The five-day RSI of the VIX is now at 18.51. Readings below 20
have often been following by some sizable corrections during the next few
trading days.
The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped lower, opened near its highs, and closed near
the lows of the day. This shift
in intraday sentiment also shows a drop in fear. The VXN is also painting the
same story. Be careful.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 31.57 | DOWN 1.25 | CVR 3, 6 SELL | 21 % Below |
At Extreme |
| VXN | 47.02 | DOWN 3.63 | CVR 3, 6 SELL | 17.10 % Below | 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 |
| OSI Pharmaceutical | OSIP |
– 57.14 | 2530 | 533 |
| Astrazeneca | AZN |
– 16.27 | 6398 | 786 |
| Marvell Technology | MRVL |
+ 11.69 | 4058 | 1821 |
| Lowe’s | LOW |
+ 11.44 | 7778 | 3374 |
| Yahoo! | YHOO |
+ 11.32 | 16647 | 4452 |
| Take-Two Interactive | TTWO |
+ 10.64 | 3367 | 309 |
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 |
| OSI Pharmaceutical | OSIP |
102.6 | 75.2 | 79.2 | 50.1 |
| Roper Industries | ROP |
55.6 | 44 | 46.7 | 37.1 |
| ING Groep | ING |
58.8 | 49.6 | 61.8 | 27.6 |
| Emmis Communications | EMMS |
65.3 | 55.2 | 74.1 | 42.5 |
| Intermune | ITMN |
155.7 | 138.3 | 141.3 | 64.2 |
| Unilab Corp. | ULAB |
75.5 | 67.3 | 65.9 | 29.1 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Pharmacia | PHA |
36.22 | 51.7 | 47.6 | 23.9 |
| Lowe’s | LOW |
41.2 | 53.5 | 60.2 | 25.1 |
| Union Planters | UPC |
26.9 | 32.4 | 37.7 | 14.3 |
| Emulex | ELX |
81.6 | 98.1 | 101.9 | 74 |
| Quest Software | QSFT |
92.8 | 109.6 | 145.6 | 76 |
| Bemis Co. | BMS |
25.8 | 29.9 | 32.6 | 20.7 |
Please use stops on every trade!