Bears Take the Day as Countdown to Fed Begins

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"It was a boring Monday on Wall Street, with very little activity," noted Schaeffer's Senior Technical Strategist Ryan Detrick. "Everyone is positioning and getting ready for Fed Chairman Ben Bernanke's speech at Jackson Hole later this week." Try as it may, the Dow Jones Industrial Average (DJI) could keep its head above breakeven, and pared Friday's triple-point gain by a noticeable margin.

Click through to see what else was on our radar today:

And now, a look at the numbers...

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

The Dow Jones Industrial Average (DJI - 13,124.67) burned off its 18.2-point intraday best and tumbled 33.3 points, or 0.3%, when the closing bell sounded. Twenty out of the 30 blue chips saw red, with Hewlett-Packard Company's ( HPQ ) 2.1% loss leading the way. Cisco Systems Inc. ( CSCO ) paced the 10 winning issues with a 0.8% gain.

Meanwhile, the S&P 500 Index (SPX - 1,410.44) followed the Dow into negative territory and the Nasdaq Composite (COMP - 3,073.19) eked out a victory. The SPX inched lower by 0.7 of point, or 0.05%, while the COMP tacked on 3.4 points, or 0.1%.

The CBOE Market Volatility Index (VIX - 16.35) advanced 7.7% to close just below its intraday high of 16.38. The VIX marked its loftiest daily settlement since Aug. 2.

Today's highlight : "I loved seeing continued mergers-and-acquisition activity," said Detrick. "With both Dollar Thrifty Automotive Group, Inc. ( DTG ) and Kenexa Corporation ( KNXA ) being bought out for significant premiums, this is a sign that companies are getting the financing that is needed for big deals. But just as importantly, companies are showing the confidence to get out there and make these deals happen."

Turning to today's major market stories...

For today's activity in commodities, options, and more, head to page 2.

Although up earlier in the session, oil futures sank for a third consecutive day, as Tropical Storm Isaac appears to pose less of a threat to Gulf Coast oil refineries than was first projected. By the close, crude for October delivery dipped 68 cents, or 0.7%, to settle at $95.47 a barrel. On the other hand, gasoline rallied, as investors readied for supply disruptions caused by the storm. With that, gasoline's September-dated contract leapt 8 cents, or 2.5%, to finish at $3.15 a gallon.

Gold futures trekked higher for a third straight day on hopes that Friday's speech by Fed Chairman Bernanke will offer a better -- and hopefully more likely -- picture of when another round of quantitative easing will be implemented. December-dated gold gained $2.70, or 0.2%, to end at $1,675.60 an ounce.

Levels to watch in trading...

  • Dow Jones Industrial Average (DJI - 13,124.67) - support at 11,500; resistance at 14,000
  • S&P 500 Index (SPX - 1,410.44) - support at 1,100; resistance at 1,500
  • Nasdaq Composite (COMP - 3,073.19) - support at 2,400; resistance at 3,400

OUTPERFORMING AND UNDERPERFORMING SECTORS

STOCKS - MOVERS

STOCKS - EARNINGS

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

SCHAEFFER'S MARKET POSTURE

At the end of every market day, the staff at Schaeffer's Investment Research reviews the trading day in detail, covering major events and key market developments. Don't miss this critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.


This article appears in: Investing , Options

Referenced Stocks: AAPL , CSCO , DTG , HPQ , KNXA

Schaeffer's Investment Research

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