Tuesday’s Options Alerts

  • January 17, 2003
  • Chris Tyler

A three pronged attack on the
ETFs left the QQQs in no man’s land, while the DIAs and SPYs sit precariously at
trading range supports. Corporate,
economic, and geopolitical news all contributed to the percentage losses in the
major averages.

Today’s action tested supports around the 50%
retracement mark in the Spyders and Diamonds, while the QQQs, as mentioned, fell
below range supports. Reports out of Microsoft and IBM were the two titans
responsible for most of today’s pressure, and as such, most of today’s carnage
fell specifically on anything tech related.

The
(
$VIX |
Quote |
Chart |
News |
PowerRating) and
(
$VXN |
Quote |
Chart |
News |
PowerRating) finished
mixed on the session, with only a CVR I buy signal registering as of the close.
My own thoughts on the matter are that volatility is still reasonably cheap, and
remains the best way to play this market. At this point I’m also leaning towards
the idea that we could see some more technical deterioration. I suspect though,
that we will see a technical bounce before heading lower, since we did close at
support levels in the two of the three ETFs. We have also seen some good
percentage selling the past three days, causing a couple of the shorter term
indicators to suggest a slight panic is finally going off in some investors
portfolios. Have a good holiday.

Points of Significance:

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 28.68 Up
+1.01		         CVR
I Buy		 4.25%
Above 		Not
At
Extreme
VXN 42.85 Down -1.96       
 None  		 0.0% Not
at Extreme

 

Abnormal Options Volume — This list
includes both percentage movers that are normally associated with an increase in
options activity, as well as stocks that have unusually high activity and / or
technical situations,
reflecting increased speculation of a potential price move.

Due to Options Expiration activity and related
unwinding, we are not including this list in tonight’s service.

Stocks With Spikes in Implied
Volatility — Stocks with Increases and Decreases in implied
volatility compared to previous day. Candidates are then screened qualitatively.
These lists represent those issues that carry a blend of liquidity and/or
technical setups that might deserve further notice. 

Spike Up

Name Symbol IV Previous
IV		 High
IV		 Low
IV
Diamonds
DIA		 24.2 22.1 39 18.5

Spike Down

Name Symbol IV Previous
IV		 High
IV		 Low
IV
eBay
EBAY		 38 45.2 62.2 38.2
Bristol
Myers		 BMY 31.3 34.8 66.8 26.5

 

Please use stops on every trade!