Wednesday’s Options Alerts
Stocks were knocked
down for the second consecutive session as consumer confidence came in much
worse than expected. Since
October 10, we haven’t seen more than a one-day pullback, but today’s economic
numbers broke that pattern at least in the S&P and the Nasdaq. The major averages dropped hard after the October
consumer confidence came in at a nine-year low of 79.4, well below
expectations of 90.1.
Threats of war with Iraq, the weak job market, declining
personal income, and the bear market were among the top culprits to the
declining consumer confidence. After hovering above their 50-day average for the past
week, the major indices dropped below the average, but stocks found support at the 50% retracement from the October
10 low.
However, stocks did stage a final-hour comeback and ended the day
well off their lows.
At the
close, the Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) actually gained 0.90 points or 0.01% after giving
up over 2% earlier in the day. The S&P
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) fell 8.08 points or
0.90% and, the Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating) lost 15.18 points or 1.15%. Despite
some gloomy outlook for the upcoming holiday season, retail
(
$RLX.X |
Quote |
Chart |
News |
PowerRating) was
the top-performing sector as it gained 0.92%.
The only other sector in the green
was gold
(
$XAU.X |
Quote |
Chart |
News |
PowerRating) up 0.09%. Losing sectors today were: oil
(
$XOI.X |
Quote |
Chart |
News |
PowerRating)
down 4.84%, Internets
(
$INX.X |
Quote |
Chart |
News |
PowerRating) down 3.76%, telecoms
(
$XTC.X |
Quote |
Chart |
News |
PowerRating)
down 3.26%, networking
(
$NWX.X |
Quote |
Chart |
News |
PowerRating) down 3.13%, and semiconductors
(
$SOX.X |
Quote |
Chart |
News |
PowerRating)
down 3.11%. Was today’s comeback due to end-of-the-month markup and hopes for a
rate cut at next week’s FOMC meeting?
The VIX
(
$VIX.X |
Quote |
Chart |
News |
PowerRating) opened near its lows, and closed slightly above its
open. This shift in intraday sentiment still shows a small increase in fear, but
it was well off today’s high.
The VIX triggered a CVR 2 and 6 sell signals. The VXN
(
$VXN.X |
Quote |
Chart |
News |
PowerRating) displayed the same action as the VIX, but it didn’t trigger
any signals.
Points of Significance:
| Volatility Index |
Close | Net Change |
Signals/Direction | % Above/Below 10 Day Moving Average |
Significance |
| VIX | 36.80 |
UP 1.13 |
CVR 2,6 SELL |
5.20% Below |
Not At Extreme |
| VXN | 52.47 |
UP 0.95 |
NONE |
2.03% Below |
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 |
| Advanced PCS |
ADVP |
+ 17.74 |
3733 |
528 |
| Tenet Healthcare |
THC |
– 7.64 |
18526 |
1313 |
| Sherwin-Williams |
SHW |
+ 12.70 |
4150 |
381 |
| King Pharmaceuticals |
KG |
– 10.83 |
6694 |
745 |
| Take Two Interactive |
TTWO |
+ 4.07 |
5958 |
1045 |
| BP PLC. |
BP |
– 6.76 |
6158 |
1435 |
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 |
|
Yankee Candle
|
YCC |
81.8 |
51.3 |
66.4 |
34.3 |
| TMP Worldwide |
TMPW |
108.6 |
78.1 |
108.7 |
68.8 |
| Astoria Financial |
AF |
37.4 |
28.1 |
39.9 |
20.1 |
| Tenet Healthcare |
THC |
46.7 |
36 |
48.8 |
25.1 |
| DRS Technologies |
DRS |
53.5 |
42.8 |
57.4 |
43.3 |
| Winnebago Industries |
WGO |
62.3 |
50.9 |
60.5 |
43.6 |
Spike Down
| Name | Symbol | IV | Previous IV |
High IV |
Low IV |
|
Affiliated Managers Group
|
AMG |
37.2 |
60.3 |
53.2 |
28 |
| Energy East |
EAS |
38.1 |
52.1 |
46.2 |
22.9 |
| Alltel |
AT |
33.6 |
44.5 |
53.2 |
24.3 |
| Sherwin Williams |
SHW |
47.1 |
61.3 |
55.9 |
29.3 |
| Big Lots |
BLI |
50.3 |
64.1 |
63.5 |
34.6 |
| Genuine Parts |
GPC |
29.8 |
37.8 |
36.5 |
17.0 |
Please use stops on every trade!