Tuesday’s Options Alerts
Another round
of negative corporate and economic news again took stocks down. The
averages started off the week on the downside as news of JDS Uniphase’s first-quarter revenue warning, Peregrine Systems’
(
PRGN |
Quote |
Chart |
News |
PowerRating)
Chapter 11 bankruptcy,
more accounting woes from Qwest communications, and weak sales forecasts from WalMart
(
WMT |
Quote |
Chart |
News |
PowerRating) and Federated Stores
(
FD |
Quote |
Chart |
News |
PowerRating)
proved too much for the market to
bear.
The indices did try an early afternoon rally, but that soon faded away. However,
a late session pop did leave the averages off their intraday lows. At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) dropped 113.87 points or 1.42%, the index closing above its 78.6 retracement level. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) fell
11.69 points or 1.38%. The Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) was the weakest of all as it dropped 36.15 points or
2.96%. The Naz also took out its July 24 low. Its next stop could be the 1.27
extension at 1128.68.
Sector-wise, anything tech got hammered today with semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) down 5.09%, biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) down 4.03%,
airlines
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) down 4.02%, AND software
(
$GSO.X |
Quote |
Chart |
News |
PowerRating) down 3.87%.
The only sectors in the green today were banks
(
$BIX.X |
Quote |
Chart |
News |
PowerRating) up 0.43% and oil
service issues
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) up 0.34%. On the economic front, the index of
leading economic indicators fell for the third straight month as the index
dropped 0.2% in August. Economists were predicting for a drop of 0.1%. Tomorrow
we have the FOMC meeting where Greenspan will decide on the direction of
interest rates.
Not much of a change in volatility today with the VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opening
near its midpoint and closing slightly below its open. This shift in intraday sentiment
shows a drop in fear. Today’s action triggered a CVR
6 buy signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
opened near its lows and closed near near the highs of the day. This shift in
intraday sentiment shows a rise in fear. No signals were triggered by the VXN.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 44.71 | UP 0.16 | CVR 6 BUY |
8.28% Above | Near Extreme |
| VXN | 59.85 | UP 0.77 | NONE | 3.44 % Above | Not 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 |
| Nucor | NUE |
-19.21 | 682 | 103 |
| Overture | OVER |
– 11.02 | 3105 | 788 |
| Zion Bancorp | ZION |
– 5.75 | 688 | 153 |
| Laboratory Corp. |
LH |
– 5.05 | 4519 | 207 |
| KLA Tencor | KLAC |
– 5.38 | 74773 | 9490 |
| Comcast | CMCSK |
– 4.33 | 47678 | 3454 |
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 |
| AT&T Canada | ATTC |
13 | 9.1 | 36.4 | 9.2 |
| Constellation Brands | STZ |
48.1 | 37 | 44.8 | 25.6 |
| Ryder Systems | R |
46.7 | 36.7 | 38.6 | 30.1 |
| Certegy | CEY |
54.6 | 44.1 | 54 | 26.1 |
| Brunswick | BC |
56.8 | 46 | 50.7 | 31.2 |
| Zion Bancorp | ZION |
41.6 | 34.3 | 35.5 | 19.7 |
Spike Down
None Today
Please use stops on every trade!