Tuesday’s Options Alerts
Stocks started off
the week on a negative note as the major averages dug deeper into multi-year
lows. Despite an attempt to
rally, stocks were held back as an earnings warning from Sears
(
S |
Quote |
Chart |
News |
PowerRating), the
ongoing port lockout, J.P. Morgan’s
(
JPM |
Quote |
Chart |
News |
PowerRating) layoffs, negative comments on
Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating), and tonight’s upcoming speech from President Bush
kept buyers at bay.Â
For most of the session stocks were mainly flat, but
a late-afternoon sell-off has the indices closing near the lows of the day. At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) dropped 105.42 points or 1.40%. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) fell
15.36 points or 1.91%, and the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) dropped 20.07 points or
1.76%. Broker/dealers
(
$XBD.X |
Quote |
Chart |
News |
PowerRating) down 4.55%, paper
(
$FPP.X |
Quote |
Chart |
News |
PowerRating) down
4.5%, retail
(
$RLX.X |
Quote |
Chart |
News |
PowerRating) down 4.43%, and banks
(
$BIX.X |
Quote |
Chart |
News |
PowerRating) were the
hardest hit. Only biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) up 0.61% and health providers
(
$RXH.X |
Quote |
Chart |
News |
PowerRating)
up 0.17% were positive today.
Volatility shot to a two-month high today. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped down, opened near its lows, and closed near the
highs of the day. This shift in intraday sentiment shows a rise in fear.
Today’s action triggered a CVR
3 and 6 buy signals. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near the
highs of its range and closed near its highs. This shift
in intraday sentiment also shows a rise in fear. Today’s action shows fear
rising to extreme levels. We could be near a much-needed bounce.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 49.18 |
UP 2.90 |
CVR 3 & 6 Buy |
11.95% Above |
At Extreme |
| VXN | 62.32 |
2.04 |
CVR I Buy |
6.05% 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 |
| Accredo Health |
ACDO |
– 12.30 |
2125 |
291 |
| Sigma Aldrich |
SIAL |
– 10.12 |
1187 |
324 |
| Sharper Image |
SHRP |
– 9.87 |
1123 |
125 |
| GATX Corp. |
GMT |
– 9.41 |
1383 |
255 |
| Cognizant Technology |
CTSH |
– 7.26 |
1748 |
376 |
| Federated Department Stores |
FD |
– 5.78 |
7372 |
2852 |
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 |
|
Texas Utilities
|
TXU |
82.3 |
59.9 |
61.6 |
17.3 |
| Sigma Aldrich |
SIAL |
59.5 |
49.4 |
46 |
27.6 |
| Hot Topic |
HOTT |
75.4 |
63.1 |
76.6 |
40.6 |
| Kroll |
KROL |
72.1 |
61.2 |
69 |
40.7 |
| Cost Plus |
CPWM |
68.5 |
588 |
55.2 |
41.3 |
| Lowe’s |
LOW |
61.7 |
53 |
60.2 |
25.1 |
| Accredo Health |
ACDO |
67.4 |
58.3 |
72 |
44.3 |
| Ann Taylor |
ANN |
72.7 |
63 |
63.7 |
40.2 |
| Coach Inc. |
COH |
84.7 |
74.3 |
77.1 |
40.6 |
| Sears |
S |
67.1 |
58.9 |
59 |
27.9 |
Spike Down
None Today
Please use stops on every trade!