After falling as far south as 12,661.48 in yesterday's session,
investors have emerged this morning determined to pull the
Dow Jones Industrial Average (DJI)
back above the 12,700 mark. A promising
from the euro zone has encouraged a bullish climate, with futures
on all three major market indexes modestly higher heading into
- Where will the
CBOE Market Volatility Index (VIX)
go next? The "fear gauge" closed above its 140-day moving average
yesterday -- a feat not accomplished since Dec. 8.
- Schaeffer's Equities Analyst Bryan Sapp explained one way to
potentially play this volatile market
- Sapp continues that the bulls need this key technical
trendline to hold on the
S&P 500 Index (
Among equities in focus,
prepared for Friday's initial public offering (IPO) with a price
Groupon (GRPN )
is on pace for an earnings-induced pop; and
Dick's Sporting Goods (DKS )
may see some additional short-covering activity following its
And now, on to the numbers...
Equity option activity on the Chicago Board Options Exchange (
) saw 971,488 call contracts traded on Monday, compared to 831,844
put contracts. The resultant single-session put/call ratio arrived
at 0.86, while the 21-day moving average was 0.71.
From the Trading Floor
Sapp points out that the "
continues to be the level on the
that must hold for the bulls. It's double the March 2009 low of
666, and served as support in February. Below there, it could run
to 1,300 in a hurry."
Elsewhere, Sapp continues, "
Sentiment continues to worsen.
However, it's impossible for the market to put in a short-term
bottom when there continues to be bad news in Europe every morning.
As long as European bond yields continue to drop, it's going to be
very tough for the market to bounce."
Currencies and Commodities
U.S. dollar index
is holding steady this morning, with the greenback last seen
flat at $80.61.
is pointed just shy of breakeven to trade 0.03% lower at $95.10
continue to slide
, with the front-month contract down 0.2% at $1,558.40 an
The Wall Street Journal
reported that social media maven
Facebook Inc. (
raised the expected price of its IPO to $34 to $38 per share from
$28 to $35 per share, as demand to get a cut of the company swells.
The new per-share price range raises the valuation of the company
to $93 billion to $104 billion. FB is scheduled to go public this
Friday, May 18.
In earnings news,
Groupon, Inc. (GRPN - 11.73)
said its first-quarter loss narrowed to $11.7 million, or 2 cents
per share. Excluding items, the online coupon concern reported a
per-share profit of 2 cents, while revenue swelled 89% to $559.3
million. The results beat analysts' expectations for adjusted
earnings of 1 cent per share on $530.6 million in sales.
were the options of choice ahead of earnings, with GRPN's
Schaeffer's open interest ratio (SOIR) checking in at 0.70. The
stock is set to jump more than 25% right out of the gate.
Dick's Sporting Goods (DKS - 47.24)
banked a first-quarter profit of $57.2 million, or 45 cents per
share, up 53% on a year-over-year basis. Sales for the period
improved 15% to $1.3 billion, aided by an 8% rise in same-store
sales. Analysts, on average, were expecting a profit of 38 cents
per share on $1.23 billion in sales. For the full fiscal year, DKS
hiked its earnings forecast to a range between $2.45 and $2.48 per
share, topping Wall Street's view of $2.43 per share. Short
interest declined by 1.9% in the latest reporting period, but still
accounts for a lofty 8% of the stock's float. DKS is up 4.8% in
Earnings and Economic Data
Today's economic calendar features the latest data on
and business inventories, along with the
consumer price index (
Empire State manufacturing index
, and the National Association of Home Builders (NAHB)
housing market index
. Companies on deck to report earnings include
Home Depot (
, J.C. Penney (JCP),
, and SINA Corporation (SINA).
Asian markets ended mostly lower today, as traders took their
cues from Wall Street's bearish start to the week. Equities with
heavy exposure to Europe were among the most notable decliners,
despite reassurances from euro-zone finance ministers that there
are no immediate plans for Greece to break away from the 17-nation
bloc. However, Internet heavyweight Tencent Holdings bucked the
selling trend in Hong Kong, with investors pricing in some optimism
ahead of Facebook's forthcoming IPO pricing. By the close, Japan's
Nikkei and South Korea's Kospi each fell 0.8%, China's Shanghai
Composite lost 0.3%, and Hong Kong's Hang Seng added 0.8%.
Stocks in Europe have climbed out of the basement at midday,
after a report showed that Germany's economy expanded by 0.5% in
the first quarter. The solid showing helped the broader euro-zone
dodge a contraction, with the region's composite GDP remaining flat
for the three-month period. At last look, the French CAC 40 is up
0.6%, the German DAX has gained 0.3%, and London's FTSE 100 is off
Unusual Put and Call Activity:
For an explanation of how to use this information, check out our
Open Interest Configurations
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