Tuesday’s Options Alerts

• October 14, 2002
• TradingMarkets Editors

After the
spectacular run of the past two days,
the major averages continued higher for the third straight session, but at a
much slower pace. It
was a choppy range-bound market as traders are digesting the huge gains of the
last two sessions.

Not much corporate news was out today, but we are heading into earnings session
with many blue chips scheduled to report this week, among them: Intel
(
INTC |
Quote |
Chart |
News |
PowerRating), Ford
(
F |
Quote |
Chart |
News |
PowerRating),
General Motors
(
GM |
Quote |
Chart |
News |
PowerRating), Citigroup
(
C |
Quote |
Chart |
News |
PowerRating), Caterpilliar
(
CAT |
Quote |
Chart |
News |
PowerRating), Coca Cola
(
KO |
Quote |
Chart |
News |
PowerRating),
Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating), Boeing
(
BA |
Quote |
Chart |
News |
PowerRating), United Technologies
(
UTX |
Quote |
Chart |
News |
PowerRating), and
Phillip Morris
(
MO |
Quote |
Chart |
News |
PowerRating).

At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) gained 27.11 points or 0.34%. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) gained
6.12 points or 0.73%, and the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) gained 10.06 points or
0.83%. Both the Dow and S&P are right up against their 38.2% retracments from
their August 22 highs.

Biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) up 5.44%, Internet
Commerce
(
$ECM.X |
Quote |
Chart |
News |
PowerRating)
up 4.78%, oil services
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) up 4.56%, and broker/dealers were the top-performing
sectors of the day. Computer hardware
(
$HWI.X |
Quote |
Chart |
News |
PowerRating), down
1.67%, REITs
(
$DJR.X |
Quote |
Chart |
News |
PowerRating), down 1.47%, utilities
(
$UTY.X |
Quote |
Chart |
News |
PowerRating), down 1.28%,
and insurance
(
$IUX.X |
Quote |
Chart |
News |
PowerRating), down 1.08%, were the worst performers of the day.

There is no economic news to report today, but we have: business
inventories on Wednesday; building permits, housing starts, initial claims, capacity
utilization, and industrial production on Thursday; and Friday, we have the CPI
numbers, as well as the trade balance.

The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near its high and closed near the lows of the day. This shift in intraday sentiment
once again shows a
drop in fear. No more CVRs were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near the
highs of its range and closed near its midpoint. This shift
in intraday sentiment also shows a drop in fear.

Points of Significance:

Volatility Index	Close	Net Change	Signals/Direction	% Above/Below 10 Day Moving Average	Significance
VIX	42.61	DOWN 0.83	NONE	5.83% Below	Not At Extreme
VXN	59.08	UP 0.21	NONE	1.48% 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
Pharmaceutical Resources	PRX	– 21.71	1017	219
Danaher	DHR	– 7.23	10023	497
Medimmune	MEDI	+ 6.17	4004	1718
XL Capital	XL	– 4.73	5959	638
Walgreen	WAG	– 2.60	9290	2175
Pharmacia	PHA	+ 2.01	15239	1369

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
Danaher	DHR	66.5	42.3	44	24.3
Northrop Grumman	NOC	51.3	44.2	55.1	26
American Electric Power	AEP	94.7	81.6	75.8	21
Allied Capital	ALD	60.9	52.5	84.2	29.1
DeVry	DV	50.1	43.2	46.6	35.6
Unilab	ULAB	64.2	56.6	76.5	29.1

Spike Down

Name	Symbol	IV	Previous IV	High IV	Low IV
Astrazeneca	AZN	44.5	51.1	60.9	31.4
Johnson & Johnson	JNJ	36.1	41.1	46.1	20.2
Kroll	KROL	83.8	94	87.8	40.7
Corinthian Colleges	COCO	58.7	65.6	76.4	38.7
Kroger	KR	45.9	51	49.1	23.1
Pinnacle West Capital	PNW	79.2	87.9	82.3	17.1

Please use stops on every trade!