Tuesday’s Options Alerts

NAS…..”DUCK!!!”
The session started out with a positive bias with no real news to speak of,
other than a couple of analyst upgrades.
For investors, this seemed to
be enough of a reason for a continuation of Fridays rally as prices were bid up
in the early going. Unfortunately, most of the gains were short lived, and
although certain sectors certainly tried for upside penetration today, in the
end most of the ETFs fell on their own weight after six weeks of higher trade.
(As mentioned in an earlier column, my general market
focus is directed towards the Exchange Traded Funds and HOLDRs as most are
actively traded and also have listed options, making them a nice fit for this
report.)

The Nasdaq and Nasdaq 100
(
QQQ |
Quote |
Chart |
News |
PowerRating)
were able to
test their recent highs, and held up for much of the session, before joining the
rest of the party, namely the S&P 500
(
SPY |
Quote |
Chart |
News |
PowerRating)
and the Dow
(
DIA |
Quote |
Chart |
News |
PowerRating)
, both of
which were firmly planted in terra firma for most of the session after the
initial opening gap. This action leaves all of the above mentioned ETFs back
inside their respective trading ranges. The words “Trading Range” are
sounding more and more like four-letter words for the momentum crowd, as the
volatility on a daily basis has been quite frustrating for those anticipating
clean follow through from one day to the next. But that’s exactly what trading
ranges do, frustrate breakout players; that includes those looking for the
breakdown out of the recent range, and those going long, anticipating the
upside. Today’s action doesn’t do much to inspire, except for the fact that the
longer we stay “home on the range” in the indices, the more likely
that we will eventually have a nice sizable move.

Volume was relatively light today as the ETFs
finished lower
, and makes more of a case for sitting tight and keeping
yourself ready for action. Mixed signals, with a slight downwards bias in the
VIX
(
$VIX |
Quote |
Chart |
News |
PowerRating)
and the
(
$VXN |
Quote |
Chart |
News |
PowerRating)
also confirm the need to stay ready for
action, but wait for entry. The VXN still managed to finish lower on the day
despite the late pressure on the Nasdaq index (inverted correlation normally),
while the VIX finished slightly higher, but is no longer at an extreme.

Points of Significance:


Volatility
Index
Close Net
Change
Signals/Direction %
Above/Below 10 Day Moving Average
Significance
VIX 31.11 Up
+.28

CVR 1, 6 Sell
8.47%
Below
Not
At Extreme
VXN 48.09 DOWN -1.59
CVR 6 Sell
7.99% 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
Cree
CREE

+5%
4156 1051
Devon
DVN
+3% 11394 1361
Burlington
Resources

BR
+1% 5365 681
Celgene
CELG
-1% 1236 357
Home
Depot

HD

+1%
39709 9733

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

AmerisourceBergin


ABC
48.1 42.7 58.6 24.8
Whole
Foods Market

WFMI
45.9 41.8 46.5 28.0
Barr
Laboratories

BRL
50.6 46.1 56.9 30.1

Spike Down

Name Symbol IV Previous
IV
High
IV
Low
IV

SPX Corp.


SPW
49.5 58.6 79.5 34.6
Techne
TECH
40.9 47.1 64.3 42.6
Pinnacle
Systems
PCLE 62.2 71.9 85.2 59.8

Please use stops on every trade!