Wednesday’s Options Alerts…

Following
yesterday’s rally, stocks were slightly lower today after receiving confirmation
that two postal workers died from anthrax. The Dow ($INDU.X)
and S&P S&P 500 ($SPX.X)
were in the red the majority of the day while the Nasdaq ($COMPQ)
spent most of the day in the black only to head lower during the final hour of
trading. Today the VIX ($VIX.X)
opened and closed in the top half of its range for the day. There was no
significant intraday shift in sentiment today. However the VIX is still near
oversold levels, which means that the market is getting close to being
overbought. On the other hand, the VXN ($VXN.X)
exhibited the opposite behavior as it opened at the top of today’s range and
closed near the bottom. Today marks the third day in a row as that the VXN has
opened near the top, only to close near the bottom of its range. Once again this
intraday shift in sentiment continues to suggest that fear is continuing to
subside. On another note, the VXN broke below its 10 day moving average which is
further evidence that fear is subsiding at least for Nasdaq stocks.

Points of Significance:

Silicon Laboratories (SLAB)
gapped up on over four times its average daily volume. Pharmacia (PHA)
gapped down below its 50-and 20-day moving averages on four times its average
daily volume. It also traded over 10 times its average contract volume. H&R
Block (HRB)
continues to head lower today; the stock dropped $2.92 on triple its average
volume. Its implied volatility is also at a new high. Cincinnati Financial’s (CINF)
implied volatility is approaching its high side. Cincinnati is trading in a head
& shoulders top and it broke its 200-day moving average today.

 

Volatility
Index
Close Net
Change
Signals/Direction %
Above/Below 10 Day Moving Average
Significance
VIX 33.19 UP .08 NONE 5.66 % Below Not at Extreme
VXN 63.73 DOWN
3.63
NONE 3.76
% 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
FreeMarkets FMKT – 25.78 3125 461
Silicon
Laboratories
SLAB +
13.73
723 209
Administaff ASF + 12.64 391 146
Pharmacia PHA -10.21 26626 2463
Cubist
Pharmaceuticals
CBST – 8.88 1667 588
Block
(HR) Inc.
HRB
8.17
6453 2520

 

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
Block (HR)
Inc.
HRB 56.3 48.9 43.4 27.5
Cincinnati
Financial
CINF 32.6 28.4 35.6 24.4
Cardinal Health CAH 35 30.7 41.2 25.8
Royal
Caribbean Cruise
RCL 108.7 96 92.6 38.4
Eclipsys Corporation ECLP 76.5 676 103.5 57.1
Avaya
Inc.
AV 55.3 49.2 77.4 51.3

Spike Down

Name Symbol IV Previous
IV
High
IV
Low
IV
Zion Bancorp ZION 30.8 39.5 42.6 21
C H
Robinson Worldwide
CHRW 32.6 39.3 53.1 25.6
Telefonos
de Chile
CTC 30.2 35.9 50.4 26.2
SEI
Investment Companies
SEIC 54.8 64.5 90.1 40.9
Energy
SPDR
XLE 25.6 30.1 32.7 17.2
AT&T
Canada
ATTC 12.6 14.7 41 10.3

 

Please use stops on every trade!