Tuesday’s Options Alerts

• June 17, 2002
• TradingMarkets Editors

Following last Friday’s dramatic
turnaround, we got something that we haven’t seen in a while…follow through.
The major averages didn’t have any significant intraday whipsaws like we’ve been
having lately. All major market indices gapped up, headed north, and really
never looked back. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) jumped over 213 points, or 2.25%, thanks
in part to Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating) and McDonald’s
(
MCD |
Quote |
Chart |
News |
PowerRating).

Meanwhile, the Nasdaq was
the strongest index, as it jumped over 3.2% with strong performances from
Internet
(
$DOT.X |
Quote |
Chart |
News |
PowerRating) and biotech issues
(
$BTK.X |
Quote |
Chart |
News |
PowerRating). All eyes will be on
the software sector tomorrow as Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating) will report fourth quarter
results. For more information on today’s action, please refer to
the market
recap.

Following Friday’s reversal, volatility
took a beating today. 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 show a decrease in fear. Today’s action triggered a CVR 2 buy signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped down, opened near the lows of the day
and closed near its highs. This shift in intraday sentiment also shows a
decrease in fear. The VXN also triggered a CVR 2 buy signal.

Points of Significance:

Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating)
jumped 12.5% on slightly higher than average volume. AMD was the best performer
today in the Semiconductor index
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), which jumped over 5%. The
shares stopped just shy of its 20-day moving average today. Also, the
Semiconductor Industry Association will release the May book-to-bill ratio
tomorrow. The important thing will be how the semis react to the news.

Broadcom
(
BRCM |
Quote |
Chart |
News |
PowerRating) gained
almost 9% today. The shares broke out of its downward trading channel. Although
volatility is somewhat high, it could possibly be a bull or ratio spread
candidate.

J.P. Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating) gained over 7% on
heavy volume today. The shares rallied strongly today, but stalled near the
confluence of its 20-, 50- and 200-day moving averages and a 61.8% retracement from
its May 17 high. A break above 35.89 would be positive for the stock.

Abnormal Options Volume With Price Movement
—
Abnormal options volume (calls and puts) with stock price movement

Stocks With Biggest Spikes in Implied
Volatility — Stocks with biggest increases or decreases in implied
volatility compared to previous day

Spike Up

Spike Down

Please use stops on every trade!