This Cloud Stock is Smoking...

A weekly analysis of what is going on in the S&P 500 seems like a good idea for the Aqumin blog.  Everyone follows the VIX (CBOE S&P 500 Volatility Index) but some of the underlying forces that make up the names in the S&P 500 are also worth noting.  My AlphaVision landscape helps break the underlying volatility action into digestible chunks.

Three things I like to look at are: where the stock has been (1 Week Total Return), how the stock has moved (HV60) and where the market thinks the volatility is going (IV30).  This is one combination of data I use to find opportunities when I write columns for the TheStreet.com's OptionsProfits and it is something AlphaVision does uniquely well.  Take a look at the IV30 less HV60 landscape above.

Tall and Green means the stocks are up for the week and the IV30 is trading at a premium to the HV60.  In many cases, there is a lot of green because of the smoother nature of HV60 and is a big reason behind why fund managers write calls successfully.  What I look for is degree.  How much "really green" and in what sectors?  This gives me an idea of what paper's expectations are for the sectors and whether I recommend calls to write.

The big red spike can't help but get your attention. That is Salesforce.com (CRM).  The giant move on earnings and the subsequent violent up moves has pushed the IV30 below the HV60 and in general is against trend for the S&P 500.  This at least looks like a warning not to sell options in CRM.  This cloud stock is smoking, and I will heed the warning.

For more information on AlphaVision visit us at www.aqumin.com.

Enjoy the Holiday!

Andrew Giovinazzi

For AV for Bloomberg users, just click in the View Library to interact with this view live (IV30 outpacing HV60 with 1 Week Total Return). If you are not an AlphaVision for Bloomberg Subscriber please follow the download link here:  Download AV for Bloomberg

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