Wednesday’s Options Alerts
Stocks continued to bleed for the
second straight session as the S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) closed within 3.33
points of their September lows while the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) traded to a
level not seen since June of 1997. The averages did try an early afternoon
comeback, but that failed during the final hour of trading. Virtually every
sector was in the red as no green was in sight, not even gold was green.
Once
again, the Nasdaq was the weakest as it dropped more than 3%, thanks in part to
heavy selling in the semis
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), Internets
(
$DOT.X |
Quote |
Chart |
News |
PowerRating), and
biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating). Semiconductors sold off more than 5% and came within 5
points of their September lows after analysts cut forecasts for many
chip makers. What looked like a quiet week has been
anything but that, although we are getting oversold, selling could accelerated
as investors could be hesitant to hold stock over the weekend. For more information on today’s action, please refer to
the market
recap.
Volatility shot up on this high volume
sell-off. The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) gapped up, opened
near its lows, and closed near the highs of the day. This shift
in intraday sentiment again shows fear rising. Once again, no CVR signals were
triggered today, but the levels of fear are reaching an extreme. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating)
gapped up, opened near its lows and closed slightly above its open. This shift in intraday sentiment
shows a increase in fear. The VXN triggered a CVR 5 buy signal.
Points of Significance:
Estee Lauder
(
EL |
Quote |
Chart |
News |
PowerRating) dropped over 8% on almost double its average volume.
The company estimated that fourth quarter earnings would come in at 18 cents a
share while analysts were calling for 20 cents a share.
Expedia
(
EXPE |
Quote |
Chart |
News |
PowerRating)
dropped more than 9% today on more than double its average volume. The company
announced that they’ve replace Deloitte & Touche with Ernest and Young as
their independent auditor. Shares of Expedia sold off today but found support
and the coincidence of its 200-day moving average and its 50% retracement level
from last September lows.
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 33.69 | UP 3.13 |
None | 8.5% Above | Near Extreme |
| VXN | 59.57 | UP 2.12 |
CVR 5 BUY |
0.42 % 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 |
| Vivendi Universal |
V | – 20.89 |
3589 | 614 |
| National Semiconductor |
NSM | * 16.75 |
4257 | 598 |
| Brocade Communications |
BRCD | – 11.97 |
12301 | 4360 |
| Americredit | ACF | – 10.85 |
2070 | 601 |
| Expedia | EXPE | – 9.42 |
8874 | 2717 |
| Estee Lauder |
EL | – 8.70 |
7375 | 441 |
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 |
| Biomet | BMET | 57.1 | 42.1 | 47.4 | 33.4 |
| Hispanic Broadcasting |
HSP | 91.5 | 69.8 | 55.6 | 39.1 |
| Cincinnati Financial |
CINF | 25.1 | 19.4 | 32 | 19.7 |
| Cardinal Health |
CAH | 47.4 | 37.2 | 34.8 | 23.9 |
| Ameripath | PATH | 99.1 | 78.7 | 56.3 | 37.5 |
| Vivendi Universal |
V | 100.9 | 80.7 | 79.1 | 38.7 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
Please use stops on every trade!