Tuesday’s Options Alerts
After last week’s
slaughter in the market, the averages looked to continue their losing ways. Early
on, Bellsouth
(
BLS |
Quote |
Chart |
News |
PowerRating), Citigroup
(
C |
Quote |
Chart |
News |
PowerRating), and J.P. Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating) put a damper
on the markets, as Bellsouth missed earnings and lowered guidance, while blue
chip financials crumbled on questions over their role in the Enron debacle.
Despite several attempts to go
positive, selling just overwhelmed buying. Last week’s selling has done serious
technical damage to the major indices: the S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) has broken
below its neckline of a head & shoulders on its monthly chart, but it did
bounce off its 78.6% retracement from its 1996 lows. At the close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
dropped another 234 points or 2.9%, the S&P 500
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) dropped
almost 28 points or 3.29%, and the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) dropped 36.50 points
or 2.76%. It was somewhat surprising that we didn’t get a bounce as we usually
do after a huge down move. Obviously we are very oversold and we would not be
surprised if at least a short-covering rally takes place sometime this week.
Fear shot up again today as investors
dumped stocks left and right. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near its lows and
closed near the highs of the day. This shift in intraday sentiment obviously
shows an increase in fear. Today’s action triggered a CVR 6 buy and we also had
a carryover CVR 6 buy from last week. The VIX is getting closer and closer to
its September 21, 2001 high at 57.31. Perhaps not everyone has thrown in the
towel yet. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped down from Friday’s close, opened near
its lows, and closed near the highs of the day. This shift in intraday sentiment
shows an increase in fear. The VXN didn’t trigger any signals today.
Points of Significance:
Panera Bread
(
PNRA |
Quote |
Chart |
News |
PowerRating) dropped more
than 10% on six times its average volume. The stock, which has been trading
above its rising 200-day moving average today, dropped back below it. The stock
has also retraced 100% of its prior upleg.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 48.23 | UP 4.78 | CVR 6 BUY | 19.79% Above |
At Extreme |
| VXN | 62.58 | UP 1.41 | NONE |
3.53 % 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 |
| Enzon | ENZN | – 16.97 | 3170 | 1090 |
| Verizon Communications | VZ | – 11.84 | 24976 | 7229 |
| SBC Communications | SBC | – 10.19 | 17627 | 5567 |
| Panera Bread | PNRA | – 10.18 | 1141 | 525 |
| Valero Energy | VLO | – 7.67 | 4631 | 971 |
| Smith International | SII | – 6.64 | 11666 | 1918 |
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 |
| Gucci | GUC | 33 | 21.7 | 25.2 | 10.3 |
| Pinnacle West | PNW | 58 | 42.8 | 42.5 | 14.2 |
| Fastenal | FAST | 50.4 | 37.3 | 34.8 | 26 |
| Jack in the Box | JBX | 46.3 | 35.1 | 32.7 | 23.7 |
| Sara Lee | SLE | 38.8 | 29.8 | 29.2 | 19.4 |
| Haliburton | HAL | 95.3 | 77.3 | 76.5 | 49.8 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Allete | ALE | 34 | 44.1 | 35.5 | 16.6 |
| National Fuel Gas | NFG | 25.3 | 31 | 31 | 24.1 |
| DSP Group | DSPG | 54.1 | 63.2 | 52.9 | 35.9 |
Please use stops on every trade!