Tuesday’s Options Alerts
Welcome back, boys. The
Generals were back with their sleeves rolled up and ready for battle. Done
with their buying, apparently at Wal-Mart, the Wall Street gang opted for some
profit-taking at the retail level during Monday’s trading session. After
gapping up on the open, the ETFs all finished substantially off their highs,
ending the day on a rather flat note, with the Nasdaq 100 being the only
percentage gainer.
As mentioned, all the ETFs experienced very nice
percentage gaps to the upside, primarily in response to a positive report out of
Wal-Mart
(
WMT |
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PowerRating) and an analyst upgrade of Intel
(
INTC |
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PowerRating). After the first
half hour of trade though, it was apparent that the Generals were giving away
some of their recently acquired possessions as the holiday buying spree that
permeated the retailers this past weekend made its way to the trading desks of
Wall Street.
Volume was strong on the day, and after eight weeks of upside for the
(
DIA |
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PowerRating)
(the media has been all over this story lately), a relatively weak close is
suggestive of institutional distribution. Relax, it’s the holiday season. Taking
some profits so you can buy the new G.I. Joe with the Kung Fu grip for your
grandkid is expected. Seriously, today’s action does merit notice, and of course
it’s always nice to have some extra cash around the holidays, but stick to your
trading plan, executing your entries and exits like the way you carved that
turkey on Thursday (no emotional attachment and surgical precision), and
tomorrow will bring more opportunities.
The
volatility indices
(
$VXN |
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PowerRating) and
(
$VIX |
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PowerRating) were mixed today as one traded
north and the other south on the day. As
I’ve stated previously, volume and price in the underlying equity markets are my
first priority when it comes to trade decisions, and although no CVR signals are
in place tonight, I personally feel cautious for the time being. This can all
change rather abruptly of course, but I’m exercising my right to manage profits
at this time. The volatility indices are low, but not so much so as to alarm me
into thinking a run on the bank is imminent. The VIX and VXN are actually still
trading in good fashion. As I’ve pointed out recently, complacency hasn’t taken
the driver’s seat thus far, but with today’s price and volume reversal, I don’t
mind getting out of the car for a little pit stop and maybe hopping back on
board up the road.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 30.05 | Down -1.03 |
No Signals |
2.56% Above |
Not at Extreme |
| VXN | 50.16 | Up +.68 | No Signals |
6.65% Above | 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 |
| Genzyme | GENZ |
+7% |
8214 | 1395 |
| Concord EFS, INC. | CE |
+5% |
9257 | 1809 |
| Silicon Laboratories |
SLAB |
+9% | 2436 | 1185 |
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 |
| InVision Tech. |
INVN |
71.4 | 62.8 | 140 |
63.8 |
| Abbott Labs |
ABT | 34.6 | 31.1 | 48.6 | 19.2 |
| PEC Solutions |
PECS |
66.2 | 59.6 | 85.1 | 60.8 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Nautilus Group |
NLS |
64.6 | 72 | 114 |
57.5 |
| Fox Entertainment |
FOX |
37.8 | 41.6 | 50.4 | 36.6 |
Please use stops on every trade!