Tuesday’s Options Alerts

Working off an overbought condition from last week,
stocks took it on the chin today as the Dow
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$INDU |
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, S&P 500
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SPX.X |
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,
and Nasdaq
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$COMPQ |
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all posted steep declines.  Boeing
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BA |
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helped pull the Dow down today as they announced that they lost the largest
Defense Department contract in history to Lockheed Martin
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. Coming off
last week’s overbought condition, the VIX
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$VIX.X |
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broke a three-day
trend today as it opened near  the bottom of its range and closed in the
upper half of its range for the day. This intra-day shift in sentiment suggests that fear is
starting to creep back into the markets. The VIX triggered a CVR
II
signal today as the RSI of the VIX upticked off oversold levels. Likewise the VXN
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$VXN.X |
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exhibited similar behavior as it opened at the low of today’s range but
the closed near the highs for today. This intra-day shift in sentiment also
suggests that fear is slowly
creeping its way back up. The VXN also triggered a CVR
II
signal today as the RSI of the VXN upticked off oversold levels.

Points of Significance:

eFunds
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EFDS |
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gapped up and reversed, forming
a super wide range key reversal bar on eight times average daily volume. eFunds
also broke below its 200-day moving. Pacific Healthcare Systems
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PHSY |
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broke out on three times average daily volume today.  Option volume was
heavy, trading six times average daily contract volume. Surebeam
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SURE |
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gapped up and reversed to close on its low on 11 times average daily volume. 
Surebeam’s option activity was heavy as it traded 63 times its average contract
volume. Lockheed Martin
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gapped up and reversed to close near its lows
on five times average daily volume, forming a key reversal bar for the
day.  Lockheed’s implied volatility is also approaching the high end of its
scale. Autonation
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AN |
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is trading in a pennant. Autonation’s
implied volatiltiy is also approaching the low end of its scale.

Volatility
Index
Close Net
Change
Signals/Direction %
Above/Below 10 Day Moving Average
Significance
VIX 32.39 UP 1.86 CVR
II
4.45 % Under Not At Extreme
VXN 60.29 UP 3.38 CVR
II
5.53 %
Under
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
eFunds
Corporation
EFDS – 21.11 755 215
Pacificare
Health System
PHSY +
16.39 
2405 351
Surebeam SURE +
12.60
4666 73
Boeing BA
10.42
18791 8911
Celestica CLS – 9.77 7050 1973
Invitrogen IVGN
8.98
1892 595

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
Expedia, Inc. EXPE 89 66.5 105.5 49.7
Telefonos de Chile CTC 41.8 35.2 50.4 26.2
eFunds Corporation EFDS 67.7 58.3 125.2 59.7
Exxon Mobil XOM 28.1 24.3 36.2 20.4
Mead Corp. MEA 50.8 44.6 53.8 27.8
CIGNA CI 41.3 36.5 43.5 28

Spike Down

Name Symbol IV Previous
IV
High
IV
Low
IV
Lockheed Martin LMT 44.2 57 47.7 29
Steris STE 53.8 66 56.7 35.2
Boeing BA 49.2 60.2 57.6 27.8
Autonation AN 41 49.8 68.6 40
Charter One Financial CF 32.8 39 36.4 22.2
Eclipsys Corp ECLP 78.7 88.4 101.2 57.1

Please use stops on every trade!