Wednesday’s Options Alerts
Stocks
started off the fourth quarter on a negative note
as the worse than expected
manufacturing report triggered a broad based decline.
A downgrade of Dow component Citigroup
(
C |
Quote |
Chart |
News |
PowerRating) amid deeper investigations into its
IPO practices and worries that Intel will cut its 2002 and 2003 estimates also
contributed to the selloff.
Sellers were out in full force today as the
averages started the day lower after weakness in the overseas markets and
finished the day near their lows. At the close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
dropped 355.45 points, or 4.10%, the S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) dropped 38.05 points,
or 4.15%. The S&P sliced through its 38.2% retracement from the July 24 low. Its next stop could be the 50% retracement at 870. Finally, the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating)
lost 51.01 points, or 3.87%.
In sector action, red was just about everywhere. Oil
service
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) issues fell 6.43% on rumors that OPEC will increase
production at is meeting on Sept. 19. Other losers included biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating),
down 5.75%, semiconductors
(
$SOX.X |
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Chart |
News |
PowerRating), down 5.08%, and broker dealers
(
$XBD.X |
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Chart |
News |
PowerRating),
down 5.03%. The only sector in the green today was gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), up
1.88%.
The economic news of the day was that lack of growth in the manufacturing
sector. The August ISM index stayed at a reading of 50.5. Expectation called for
a 51.7% return.
Volatility was ramped up today. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near
its lows, and close near the highs of the day. This shift in intraday sentiment
shows a huge jump in fear. The VIX once again triggered a CVR 3 buy signal. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
had an inside day today, it gapped, opened near its lows, and closed near the
highs of the day. This shift
in intraday sentiment also shows an increase in fear. The VXN also triggered a CVR
3 buy signal today. As fast as we came down, fear is at an extreme and this
market is getting oversold.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 43.86 | UP 8.06 | CVR 3 BUY |
27.09% Above | At Extreme |
| VXN | 58.79 | UP 3.81 | CVR 3 BUY |
15.91 % Above | 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 |
| TECO Energy | TE | – 18.07 | 6574 | 891 |
| CV Therapeutics | CVTX | – 9.71 | 1438 | 576 |
| Comcast | CMCSK | – 9.52 | 11602 | 3079 |
| Household International | HI | – 7.61 | 16587 | 5544 |
| Noble Drilling | NE | – 7.01 | 3398 | 210 |
| Beazer Homes | BZH | – 6.38 | 1620 | 496 |
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 |
| Golden State Bancorp | GSB | 14.2 | 8.7 | 35.1 | 10.3 |
| TECO Energy | TE | 63.6 | 49.8 | 50 | 21.1 |
| Exxon Mobil | XOM | 41 | 33.1 | 46.7 | 15.7 |
| Abott Labs | ABT | 45.4 | 37.1 | 48.1 | 22.8 |
| Citigroup | C | 56.5 | 46.2 | 65 | 23.6 |
| Bank One | ONE | 36.8 | 30.2 | 46.2 | 22.7 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Allied Capital | ALD | 54 | 64.2 | 84.2 | 27.2 |
Please use stops on every trade!