Tuesday’s Options Alerts
We got something
today that we haven’t seen for a while… follow through. The
major indices started the week off on a very positive note after a very volatile
week last week. All three averages rallied sharply from the get go and never
looked back. At the close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) had its third biggest gain in
history as it shot up 447.49 points or 5.41%. The index did stall at resistance
near the coincidence of its 20-day moving average, 38.2% retracement, and a 50%
retracement, but blasted through it by the close.
The S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating)
gained over 46 points or 5.40% and the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) gained 73 points or
5.79%. Nearly
every sector was in the green. Telecoms
(
$XTC.X |
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Chart |
News |
PowerRating), networking
(
$NWX.X |
Quote |
Chart |
News |
PowerRating),
and airliners
(
$XAL.X |
Quote |
Chart |
News |
PowerRating) were stellar perfomers. Even semiconductors
bounced back almost 7% after a weak performance last week.
Volatility once again got shot down
after running near its September highs last week. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped
down, opened near
its highs, and closed near the lows of the day. This shift
in intraday sentiment again shows a big decrease in fear. We got a CVR
3 sell signal today. We’re also close to a CVR 2 sell as perhaps some
complacency is setting in after the recent spike in fear. This rally does look
like it has more room to the upside. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) also sold off hard
after hitting its October highs. The VXN gapped down, opened near its
highs,
and closed near the lows of the day. The VXN triggered a CVR
3 sell signal.
Points of Significance:
Taro Pharmaceuticals
(
TARO |
Quote |
Chart |
News |
PowerRating) gained 9% on double its average volume and
hit a two month high. The
shares also took out an intermediate-term downtrend line and looks like a failed
descending triangle pattern. The September 30 calls appear somewhat cheap when
compared to its historical volatility.
Action Performance
(
ATN |
Quote |
Chart |
News |
PowerRating) jumped 20% on more than double its average volume. The
stock gapped about an intermediate term downtrend line, but there is significant
resistance ahead near its 50-day moving average.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 33.73 | DOWN 6.71 | CVR 3 SELL | 21.21% Below |
Not At Extreme |
| VXN | 57.57 | DOWN 11.45 | CVR 3 SELL | 10.78% Below | 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 |
| Action Performance | ATN |
+ 20.65 | 426 | 201 |
| Saint Paul | SPC |
+ 11.81 | 939 | 245 |
| Enzon | ENZN |
+ 9.52 | 10024 | 1573 |
| Taro Pharmaceuticals | TARO |
+ 9.17 | 467 | 204 |
| United Rentals | URI |
+ 8.82 | 904 | 113 |
| John Hancock Financial | JHF |
+ 8.62 | 1274 | 171 |
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 |
| PRG Schultz | PRGX |
99.9 | 76.3 | 73.6 | 42.4 |
| Ceridian |
CEN |
65.9 | 51 | 47.9 | 25.9 |
| Choicepoint | CPS |
49.1 | 39.4 | 48.8 | 22.4 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| XL Capital | XL |
47.4 | 64.7 | 67.6 | 25.6 |
| Constellation Brands | STZ |
33.4 | 44.6 | 44.8 | 25.6 |
| J.P. Morgan | JPM |
66.1 | 85.8 | 79.5 | 29.4 |
| American Express | AXP |
41.7 | 53.9 | 54.5 | 30.2 |
| Citigroup | C |
49.9 | 64.1 | 65 | 23.3 |
| Univision | UVN |
71.3 | 90.4 | 86.8 | 37.1 |
Please use stops on every trade!