Wednesday’s Options Alerts
The major indices
got off to a good start following the blow-out July durable goods numbers. However,
the tides quickly shifted after the release of the consumer confidence numbers.
The indices had drifted lower all day, but ended the day slightly off their
lows.
At the close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) dropped 94.60 points or 1.06% to close below a trendline
drawn from the July 24 low. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) fell 13.12 points or 1.38%,
approaching potential support near its 50-day moving average and
its upward trendline. The Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) and tech stocks were the
hardest hit today as it dropped almost 44 points or 3.15%.
Techs sold off hard
after Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) chairman had some less-than-lukewarm comments about the
PC environment. Although volume was lighter than usual, it did pick up today.
The July durable goods jumped 8.7%, easily topping the 1.4% expected increase.
But consumer confidence for August came in at 93.5, well below July’s reading of
97.4. This was the lowest reading of the year. Today’s sell off was broad based,
but tech issues took the biggest beatings. Semis
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) dropped 5.91%,
biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating) down 4.98%, and Internets
(
$DOT.X |
Quote |
Chart |
News |
PowerRating) down 4.57%.
Gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) up 3.03%, oil
(
$XOI.X |
Quote |
Chart |
News |
PowerRating) up 0.44%, and defense
(
$DFI.X |
Quote |
Chart |
News |
PowerRating)
up 0.33% were the only sectors in the green today.
After spending some time away from it, it appears that volatility is reverting to its mean. 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
again suggest a rise in fear. No CVRs were triggered today. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
opened near the lows of the day, and just above its midpoint. This shift
in intraday sentiment also shows a rise in fear. The VXN didn’t trigger any CVRs
either. If you picked up puts recently, they will benefit from rising
volatility and the drop in prices.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 32.73 | UP 0.44 | NONE | 0.001 % Above |
Not At Extreme |
| VXN | 50.01 | UP 1.59 | NONE | 2.69 % 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 |
| Myraid Genetics | MYGN |
– 11.11 | 947 | 186 |
| Mercury Interactive | MERQ |
– 6.89 | 3413 | 1376 |
| Agilent Technologies | A |
– 5.49 | 5086 | 1101 |
| Harris | HRS |
– 3.33 | 1850 | 163 |
| Astrazeneca | AZN |
– 3.33 | 32197 | 2496 |
| Northrop Grumman | NOC |
+ 3.21 | 8068 | 3227 |
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 |
| Coinstar | CSTR |
65.5 | 53.3 | 72.1 | 42.8 |
| Chico’s FAS | CHS |
63.4 | 52.9 | 80.5 | 39.1 |
| Rehabcare Group | RHB |
53.6 | 45.7 | 64.2 | 47.9 |
| Apollo Group | APOL |
52.9 | 45.7 | 58.3 | 33 |
| Talbots | TLB |
51.3 | 45.9 | 55.4 | 35.1 |
| Gilead Sciences | GILD |
59.3 | 53.6 | 87.8 | 51.1 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Golden State Bancorp | GSB |
8.7 | 15.2 | 35.1 | 18.4 |
| Kinder Morgan | KMR |
25.6 | 35.7 | 47.9 | 25.8 |
| TRW Inc. | TRW |
22.6 | 26.7 | 42.6 | 14.6 |
| Brookline Bankcorp | BRKL |
20.8 | 24.3 | 36.3 | 22.8 |
| Cooper Industries | CBE |
41.8 | 46.8 | 58.3 | 32.8 |
| Occidental Petroleum | OXY |
25.2 | 27.4 | 36.2 | 21.1 |
Please use stops on every trade!