Wednesday’s Options Alerts
After yesterday’s
tremendous gains, the indices ended mixed. President
Bush’s signing of the Sarbanes-Oxley Act,
which will put stiffer penalties against corporate corruption, did give the
indices a nice intraday run in the face of the negative economic report. By the close, the Dow
(
$INDU |
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PowerRating)
dropped 31.85 points or 0.36%, the index was down over 170 points earlier in the
day. The S&P 500
(
$SPX.X |
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PowerRating)
gained 3.82 points or 0.42% and the Nasdaq
(
$COMPX |
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PowerRating) had the strongest
showing in anticipation of second quarter results from KLA-Tencor
(
KLAC |
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PowerRating) as
it gained 8.93 points or 0.66%.
Nearly
every sector was in the green. Telecoms
(
$XTC.X |
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PowerRating), networking
(
$NWX.X |
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PowerRating),
and airliners
(
$XAL.X |
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PowerRating) were stellar performers. Even. On the economic
front, July consumer confidence took a nose-dive as the tumbling stock market
and more corporate accounting scandals took consumer confidence to a 5-month low.
The monthly index fell to 97.1 from June’s reading of 106.3. This was the
largest drop since last October.
Volatility had an inside day today. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped
up, opened near
its highs, and closed near the midpoint of its range. This shift
in intraday sentiment again shows a small decrease in fear. We have a CVR 2 sell
signal for today and the VIX is still stretched a little too far on the downside.
It might be a time to tighten up stops.
The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) also gapped up, opened near its
highs,
and closed near the lows of the day. This shift
in intraday sentiment also shows a small decrease in fear. The VXN didn’t trigger any CVR signals today, but it too is stretched a little too far down.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 35.15 | UP 1.42 | CVR 2 SELL | 16.55 % Below |
At Extreme |
| VXN | 56.46 | DOWN 1.11 | None | 10.93% Below | 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 |
| Sealed Air | SEE |
– 41.75 | 2285 | 321 |
| CSG Systems | CSGS |
– 33.35 | 1028 | 187 |
| Concord EFS | CEFT |
– 15.64 | 4882 | 1218 |
| ICOS | ICOS |
+ 11.16 | 1906 | 571 |
| Millenium Pharmaceuticals | MLNM |
+ 9.12 | 7147 | 2010 |
| Human Genome Sciences | HGSI |
+ 7.50 | 2935 | 1079 |
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 |
| Sealed Air | SEE |
80 | 53.4 | 48.8 | 37.3 |
| Dreyers Grand Ice Cream | DRYR |
19.4 | 14.5 | 33.8 | 11.2 |
| Sylan Learning Systems | SLVN |
67.9 | 51.8 | 55.8 | 28.8 |
| Biosite Diagnostics |
BSTE |
102.3 | 84.5 | 102.0 | 47.7 |
| Winn-Dixie | WIN |
53.2 | 46.4 | 50 | 34 |
| Concord EFS | CEFT |
55.4 | 48.5 | 52.5 | 31.5 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Chico’s FAS | CHS |
49.2 | 63.2 | 74 | 39.1 |
| Pinnacle West Capital | PNW |
38.9 | 49.3 | 56.8 | 14.2 |
| Cinergy | CIN |
43.3 | 54.6 | 59.1 | 16.5 |
| Hibernia | HIB |
36.5 | 44.2 | 43.5 | 20.4 |
| Duke Energy | DUK |
61.9 | 73.4 | 80 | 25.3 |
| Federated Investors | FII |
47.9 | 56.2 | 53.7 | 24.5 |
Please use stops on every trade!