Wednesday’s Options Alerts
When we last left off, the
ducks had been quacking and it looked as though Rabbit season was going to be
called off due to lack of interest (Nightly Options report 11/22/02). As it
turns out, investors have decided it’s Turkey season. Today’s
selling, after so much “basting” (trading range) and preparation had
been done in order to take the markets out of the oven (breakout), only to put
it right back where it came from, is of course frustrating, but it doesn’t mean
we won’t eventually enjoy the main course. Remember it takes time to cook a
turkey properly.
Technically the markets are still in good shape.
The ETFs have pulled back on lighter volume in what should be considered fairly
orderly, ho-hum pre-holiday trade. Although the S&P 500
(
SPY |
Quote |
Chart |
News |
PowerRating) and Dow
(
DIA |
Quote |
Chart |
News |
PowerRating)
have slipped below the target everyone had their sights and trigger fingers
glued to in Thursday’s trading (Duck season!!!), the Nasdaq 100
(
QQQ |
Quote |
Chart |
News |
PowerRating) and the
semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) are still trading above their respective breakout
levels, while volatility has reverted back towards shorter term averages. These
are constructive signs, as it shows that the level of complacency decreased,
while the markets have still managed to hold in there thus far.
As we’re heading into the holiday, I’m sure some
trimming of the portfolio was done as the season to be merry started a bit ahead
of schedule. Maybe you decided to make some room for the bounty that’s heading
our way on Thursday or just figured that it’s always nice to give (profit taking)
after one has received. But, remember to digest your portfolio properly. The
market, unlike the holiday, is comprised of more than just one day, and is
capable of delivering plenty more gifts to all of the good traders who continue
to do their homework during the holiday season. Good luck.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 28.74 | Up +1.79 |
CVR 2 Sell |
4.32% Below |
Not at Extreme |
| VXN | 48 | Up +2.31 | No Signals |
0.0% | Not at Extreme |
Abnormal Options Volume — This list
includes both percentage movers that are normally associated with an increase in
options activity, as well as stocks that have unusually high activity,
reflecting increased speculation of a potential price move.
| Name | Symbol | Net % Change |
Volume | Avg. Volume |
| Cablevision Systems |
CVC |
-8% |
31353 | 2156 |
| Waters | WAT |
-4% | 3206 | 374 |
| Wells Fargo |
WFC |
-3% | 12748 | 4424 |
Stocks With Spikes in Implied
Volatility — Stocks with Increases and Decreases in implied
volatility compared to previous day. Candidates are then screened qualitatively.
These lists represent those issues that carry a blend of liquidity and/or
technical setups that might deserve further notice.
Spike Up
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
|
PEC Solutions |
PECS |
68 | 52.5 | 85 | 63.5 |
| Emerson Electric |
EMR |
36.3 | 30.3 | 43 | 28.3 |
| Sealed Air |
SEE | 105 | 92 | 121 | 37.3 |
| Gilead Sciences |
GILD | 44.3 | 39.4 | 87.8 | 43.9 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
| NONE |
Please use stops on every trade!