Monday's Option Alerts

When we last left off, the ETFs were attempting to show support for the first levels off technical support. A very short lived attempt at higher prices in the early going was followed by some very attractive RST and 1,2,3 reversal action at lower prices, confirmed by even stronger price "awareness zones". The end result was a "hammer" finish for longs, going into Friday's trade. Friday's early trade was kind enough to help longs out by producing a price gap follow thru on the open. The gap came on the heels of some "lagging economic report", which was promptly discounted by traders, establishing a quick trend lower, followed by lethargic consolidating for the balance of the session. Volume has continued to dwindle the past three days of trade, with closing prices resulting in losses between one third to one full percentage point.

The technical supports from Thursday's lows have not been taken out as of yet, but those last three little words sum it up best for yours truly. The VIX is now stretched down to the 2 Bollinger Band on the daily chart after reversing back to the downside in today's session. This also happens to be the 1.62 price extension from the March 3rd low to the March 12 high. CVR sell signals are also confirming further downside potential in the index proxies.  

Remember the position that I was talking about? Well, to date it hasn't been the "best date" that one could be on. The net result has been some scalp opportunities, with no skin lost in the process, off of the key forementioned technical levels. With today's action triggering Trap Door "shorts" against a backdrop of resistance in the form of the 200-Day SMA, the intraday 1 Volatility Band, as well as 50% Fibonacci cycle from the week's high to low, the net result has been a scratch thus far. That could change very rapidly with the next move. Going from a delta neutral lean to one in which a scalp "short" was made against the short setup this morning has the position going out short deltas. This could have been "shored up" by the close, and although this strategy now could potentially backfire somewhat, if the market were to trade drastically higher, we'll continue to let price action, confirmed by our reading of the VIX, be the positions guide. Time will tell if this is a Forrest Gump move or not, but until then "life is like a box of chocolates...".

Points of Significance:

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 and / or technical situations, reflecting increased speculation of a potential price move.

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

Spike Down

Please use stops on every trade!