Tuesday’s Options Alerts
Stocks continued to bleed today
following last week’s heavy selling. Any attempts at a rally was met with more
selling. The Nasdaq
(
$COMPQX |
Quote |
Chart |
News |
PowerRating) closed below the .618 retracement from its
September lows and the S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) is close to its .50
retracement from its September lows. Semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) and software
issues had a slight bounce, but biotechs suffered the worst as they dropped
another 2%. For more information on today’s action, please refer to
the market
recap.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating)
opened near the bottom third of its range and closed near the highs of the day.
Once again this intraday shift in
sentiment
suggests an increase in fear. No new CVR signals were triggered today, but we are
close to a CVR II sell signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)Â opened near the
lows of the range and closed on its highs. This intraday shift in sentiment
also suggests that fear is still increasing. The VXN triggered a CVR
III sell signal today. Volatility once again spiked up today’s sell-off. The
market is very oversold and a bounce is likely.Â
Points of Significance:
Biovail
(
IVGN |
Quote |
Chart |
News |
PowerRating) dropped 20% on
almost seven times its average volume. The shares came under pressure today as
analysts grilled the company on three issues: quality of earnings, mishandling
of a recent patent filing, and delays in new drug filings. Shares of Biovail are
starting to break down from a head and shoulders top on its weekly chart.
There is heavy activity in the June 45 puts.
Checkpoint Software
(
CHKP |
Quote |
Chart |
News |
PowerRating)
dropped another 5% on heavy volume. The stock continues to break support level
after support level. There is very heavy activity in the June 15 puts.Â
Walt Disney
(
DIS |
Quote |
Chart |
News |
PowerRating) dropped 4.5% on
slightly below average volume. The company came under pressure today after a
Wall Street Journal article criticized the company about its corporate governance
practices a la Enron. Shares of Disney did manage to close right on an
intermediate-term trendline. There is heavy activity in the June 20 puts.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 26.11 | UP 1.47 |
CVR III SELL |
17.45% Above |
At Extreme |
| VXN | 45.12 | UP 2.88 |
CVR III SELL |
11.65 % Above |
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 |
| Biovail | BVF | – 20.77 |
4835 | 1816 |
| Action Performance |
ATN | – 9.40 |
633 | 149 |
| Globespan Semiconductors |
GSPN | – 7.48 |
2056 | 789 |
| Check Point Software |
CHKP | – 5.44 |
22632 | 7973 |
| Emerson Electric |
EMR | – 5.13 |
1226 | 444 |
| Disney | DIS | – 4.48 |
11623 | 5363 |
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 |
| Biovail | BVF | 63.8 | 49.8 | 61.5 | 33.8 |
| United Parcel Services |
UPS | 14.4 | 11.8 | 25.3 | 11.5 |
| Tyco International |
TYC | 100.4 | 85.3 | 109.3 | 28.7 |
| Verizon Communications |
VZ | 37.5 | 31.9 | 33.2 | 24.2 |
| Clear Channel Comm. |
CCU | 44.1 | 38.1 | 48.8 | 35.4 |
| Macrovision | MVSN | 77.8 | 67.9 | 88.4 | 64.4 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Basic Industries SPDRs |
XLB | 16.3 | 23.2 | 42 | 16.8 |
| PennzEnergy | PZL | 26.3 | 34.8 | 51.4 | 29.6 |
| Alliant Energy |
LNT | 18.3 | 22.1 | 19.8 | 16.5 |
| Rosyln Bancorp |
RSLN | 23 | 27.7 | 38.8 | 24 |
| Simplex Solutions |
SPLX | 32.9 | 39.2 | 92.5 | 65.3 |
| Teco Energy |
TE | 25.8 | 29.8 | 28 | 15.9 |
Please use stops on every trade!