Wednesday’s Options Alerts

  • December 17, 2002
  • Chris Tyler

Investors don’t seem to be
stuffing their “stockings” as two of the three ETF’s (SPY’s and DIA’s)
retreated from yesterday’s rally. Another
uninspiring sign from market participants is the continual lack of volume. The
action is still marked by an uptrend in the indices, but lack of conviction in
the form of leadeship and recent volume trends in both directions, has both the
bears and bulls “itching to see what’s really under the Christmas
tree” (a little rhyme to get us in the spirit). The culprits weighing in on
the averages were Target and McDonalds. Apparently though, some of the kiddies
on Wall Street still think there is a Santa Clause, or that their getting that
new XBox console, as technology (QQQ’s) was able to finish the day essentially
flat on the session. 

It’s the same ol’ story technically as where we
last left off. Price was looking interesting for the bulls yesterday, but the
“intensity”, the support from the Generals in the form of volume is
still nowhere to be found. Technically we remain in an uptrend off the October
lows, but until we hear the siren call of institutional support we remain at
best, cautiously optimistic, but always 100% ready.

 The 
(
$VIX |
Quote |
Chart |
News |
PowerRating) and the
(
$VXN |
Quote |
Chart |
News |
PowerRating) are not producing any CVR signals this evening, but
as prices in these indices have slipped to their lowest levels in two weeks I am
concerned. Price and volume in the equities and ETF’s are my first concern, so
when I see prices are moving laterally and volume is light (current), while at
the same time the volatility levels are falling, it’s safe to say that my guard
is definitely raised. Have a good night.

 

Points of Significance:

Volatility
Index		 Close Net
Change		 Signals/Direction %
Above/Below 10 Day Moving Average		 Significance
VIX 30.08 Up
+.10		   
No Signals		 5.6%
Below
Not at Extreme
VXN 48.28 Down -1.56    No
Signals		 6.7% Below 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
RJ
Reynolds 
RJR		       
-1%		 13143 1246
Yahoo
YHOO		       
+1%		 30,180 7469

 

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
Avid
Technology
AVID		 72.1 64.5 72.3 50.1
Golden
West Financial		 GDW 32.3 29.6 41.5 20.7
3M
Mfg.		 MMM 30.2 27.3 43.3 54.6

 

Spike Down

None Today

 

Please use stops on every trade!