Wednesday’s Options Alerts
After weeks of
stellar gains , stocks gave back a good chunk of yesterday’s gains.
After piercing through their respective 50-day moving averages yesterday, the
indices pulled back and formed an inside bar today but they still hung above
their 50s today.
Once again, volume was on the light side. It was a relatively quiet session
today with no major economic news to report. About the
biggest news today was that Cisco Systems
(
CSCO |
Quote |
Chart |
News |
PowerRating) was buying privately held
switch maker Andiamo Corporation.
At the close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating)
gave back 118.72 points or 1.32%, S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) gave back 13.27 points or
1.39%, and the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating)
fell 17.97 points or 1.28%.
Strongest sectors of the day were telecoms
(
$XTC.X |
Quote |
Chart |
News |
PowerRating), airliners
(
$XAL.X |
Quote |
Chart |
News |
PowerRating),
and biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating). Weakest sectors were semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)
down 4.78%, oil services
(
$OSX.X |
Quote |
Chart |
News |
PowerRating) down 4.13, and software
(
$GSO.X |
Quote |
Chart |
News |
PowerRating)
down 2.21%.
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened near
the midpoint of its range and close near the lows of the day. This shift
in intraday sentiment once still shows a drop in fear, but the bigger picture
says that this might be changing. We have yet another repeat CVR 3 sell
plus a new CVR 2 sell today. We also have a carryover CVR 6 sell.
The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
formed an inside bar today. It gapped higher, opened near its highs and closed near
the midpoint of its range. This shift
in intraday sentiment also shows a drop in fear. The VXN also triggered the same
signals as the VIX. With multiple signals in place from both indices, a
correction could be near.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 32.56 | UP 0.99 | CVR 2, 3, 6 SELLS | 11.71 % Below |
At Extreme |
| VXN | 47.71 | UP 0.69 | CVR 2, 3, 6 SELLS | 13.36 % 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 |
| Zoran | ZRAN |
– 11.08 | 556 | 230 |
| Century Tel | CTL |
– 7.37 | 452 | 210 |
| Agilent Technologies | A |
– 7.11 | 452 | 210 |
| Staples | SPLS |
– 7.21 | 3303 | 1173 |
| Intermune | ITMN |
+ 3.43 | 4886 | 361 |
| Genetech | DNA |
+ 2.88 | 9185 | 1509 |
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 |
| HSBC Holdings | HBC |
26.8 | 22.4 | 32.2 | 18.7 |
| Western Resources | WR |
50.1 | 42.3 | 47.6 | 23.5 |
| Meristar Hospitality | MHX |
46.1 | 39.2 | 41.9 | 19.5 |
| Bristol Myers Squibb | BMY |
52 | 44.8 | 66.8 | 26.5 |
| NCR Corp. | NCR |
41.2 | 36.9 | 51.1 | 32.4 |
| CenturyTel | CTL |
49.7 | 44.6 | 58.4 | 27.6 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| Pharmacia | PHA |
36.22 | 51.7 | 47.6 | 23.9 |
| Lowe’s | LOW |
41.2 | 53.5 | 60.2 | 25.1 |
| Union Planters | UPC |
26.9 | 32.4 | 37.7 | 14.3 |
| Emulex | ELX |
81.6 | 98.1 | 101.9 | 74 |
| Quest Software | QSFT |
92.8 | 109.6 | 145.6 | 76 |
| Bemis Co. | BMS |
25.8 | 29.9 | 32.6 | 20.7 |
Please use stops on every trade!