Tuesday’s Options Alerts
The major averages tried for a bounce
today after Friday’s huge reversal day. There was an early morning scare as the
FBI captured a “dirty bomb” suspect who planned to explode a radioactive bomb. The markets did trend higher after that, but a late-afternoon sell
off left the indices off their best levels of the day.
The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
and S&P held on to slim gains while the Nasdaq slipped into the red after the
semis turned weak. Best performing sectors today included airlines
(
$XAL.X |
Quote |
Chart |
News |
PowerRating),
drugs
(
$DRG.X |
Quote |
Chart |
News |
PowerRating), and retail
(
RTH |
Quote |
Chart |
News |
PowerRating) as Walmart
(
WMT |
Quote |
Chart |
News |
PowerRating) and J.C. Penney
(
JCP |
Quote |
Chart |
News |
PowerRating) forecasted higher same-store sales for June. Worst performers of the
day included: natuaral gas
(
$NGX.X |
Quote |
Chart |
News |
PowerRating), telecoms
(
$XCI.X |
Quote |
Chart |
News |
PowerRating) and gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) which dropped 4.5%. For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened
near its highs and closed near the midpoint of its range. This shift
in intraday sentiment shows a decrease in fear. No CVR signals were triggered by
the VIX today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) also gapped up, opened near its
highs
and closed near the lows of the day. This shift in intraday sentiment shows a
decrease in
fear. The VXN triggered a CVR
I and 3 buy signal. The strong reversal today could push the markets higher
next week, but remember we are still in a downtrend.
Points of Significance:
Cree
(
CREE |
Quote |
Chart |
News |
PowerRating) gained over 15% on
over triple its average volume. The shares were boosted today after the company
raised its fourth quarter revenue growth to between 8 to 11%, up from 5%. Cree attributed the increase to strong demand for LED products. The
company also reaffirmed that they’ll be on track to meet earnings targets of a penny a share for the quarter ending June 30. Shares of Cree are trading near
the highs of its two month base. There is heavy activity in the July 15
calls.
Amazon.com
(
AMZN |
Quote |
Chart |
News |
PowerRating)
dropped almost 7% on heavy volume. The shares fell today after a Barron’s article questioned the e-tailer’s valuation. Separately, the SEC conclude a
21month long investigation into Amazon’s accounting practices. Amazon appears to
be clean. There is heavy volume in the July 17.5 and 20 puts. Its implied
volatility is somewhat low.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 26.15 | DOWN 0.50 |
NONE | 5.02 % Above |
Not At Extreme |
| VXN | 52.57 | UP 0.33 |
CVR 6 BUY |
8.79 % 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 |
| Cree Inc. |
CREE | + 15.18 |
1999 | 123 |
| Agnico Eagle Mines |
AEM | – 9.20 |
1213 | 466 |
| Amazon.com | AMZN | – 6.88 |
9790 | 4255 |
| USA Networks |
USAI | – 6.58 |
2313 | 640 |
| InVision Technologies |
INVN | + 4.81 |
3858 | 1203 |
| Adobe Systems |
ADBE | + 4.76 |
9045 | 972 |
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 |
| Pediatrix Medical Group |
PDX | 67.1 | 44.4 | 71.9 | 34.3 |
| Molex | MOLX | 55.4 | 44.6 | 46.7 | 37.7 |
| Cablevision Systems |
CVC | 100.6 | 83.3 | 83.3 | 40.7 |
| SPX Corp. |
SPW | 45.7 | 38.3 | 79.5 | 34.6 |
| Echostar Communications |
DISH | 57.8 | 50 | 52.9 | 33.7 |
| CACI International |
CACI | 61 | 53.7 | 67.2 | 42.7 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Tyco International |
TYC | 155.5 | 184.1 | 132.8 | 30.8 |
| Roslyn Bancorp. |
RSLN | 22.6 | 26.7 | 36.1 | 21.4 |
| Allied Capital |
ALD | 39.2 | 45.5 | 44.7 | 21.5 |
| Western Resources |
WR | 30.6 | 34.7 | 32.3 | 23.5 |
| Express Scripts |
ESRX | 50.9 | 57.5 | 56.8 | 30.4 |
| Family Dollar Stores |
FDO | 25.9 | 28.1 | 36.4 | 26.3 |
Please use stops on every trade!