Thursday's Options Alerts

Wednesday's 'box of chocolates' came up empty after unwrapped. Coca-Cola fizzled any attempts at a rally this morning, as inspiring earnings reports out of the likes of JP Morgan, Intel, and Linear Technologies, to name a few, were not enough to keep positive traction for the market averages. Heavier volume on wide range bars down have two of the ETFs notching distribution of about 2% on the session. The third, the QQQs were held to about the unchanged mark on semiconductor strength out of Intel and Texas Instruments.

Was there a trade to save the position? I'm referring to my achilles heel, which although a pain, does show that even in a difficult market, if the position is managed properly can show positive results. Depending on how aggressively managed, will show drastically different results in a market that has essentially churned since first talked about in this column. Since April 7th, there has been very little in the way of market follow through. On a closing basis we are down about a quarter of a point in the Diamonds, in the underlying. Yikes!! If scalping off of Haggerty reversals, and using our price support and resistance levels, then its not nearly as scary. Today for instance, with a conservative 10 to 15 deltas assigned against the calls, a short in the DIAs on the 10:35 bar at 84.05 (this is a 1,2,3 entry) after failing below resistance (unfortunately the market never even gave life to the calls above 85) was a potential play. This is not without risk, nothing is, but it is a solid set up within the confines of a well defined trading plan. It also happened to be the last reversal entry for you "haggo" disciples out there, until maybe the 12:55 bar, and a full .50 lower...as I said yesterday "what doesn't kill you only makes you stronger", could also be followed up by "no harm, no foul". We didn't get the chance to stay ahead in this example, but it does go to show good reason for always staying spread.

I'll say it again, volatility levels as measured by the VIX continue to play "stupid human tricks". The price action is stretching the bands as it tests Year-To-Date lows, and is once more giving off multiple CVR signals. Gamma ramma time is once again at hand.

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!