Dow Breaks Its Winning Streak (Albeit Barely), S&P Clings to Support

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"It was a very slow day, without a lot of big news," noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "We will have hundreds of earnings and a Fed meeting later this week, though," he added, "so expect more volatility to come soon." In today's trading, the Dow Jones Industrial Average (DJI) pegged another new multi-year high out of the gate but spent much of the day slightly below breakeven, ultimately closing with a slight loss.

Continue reading for more on today's market, including :

  • Senior Trading Analyst Bryan Sapp reviews the key levels to watch and an interesting metric to consider during the " big week ahead ."
  • Options action heated up in Facebook Inc ( FB ) ahead of earnings, with speculators honing in on both calls and puts.
  • For the first time in 2013, the VXX failed to hit a new lower low , and Schaeffer's Contributor Adam Warner has the details.
plus...
  • Fitch Ratings dismisses its earlier threat, Yahoo! ( YHOO ) speculators prepare for earnings, and Nokia ( NOK ) strategists expect limited volatility.

The Dow Jones Industrial Average (DJI) wasn't able to muster a seventh consecutive up day, despite notching a new multi-year peak of 13,915.72 in early trading. At the closing bell, the blue-chip index was off 14 points, or 0.1%. Leading the dozen Dow names that moved higher today was Caterpillar ( CAT ), which rose nearly 2% after its earnings report . Bringing up the rear was Alcoa ( AA ), which closed with a 1.4% loss.

The S&P 500 Index (SPX) spent the majority of the session trading below the breakeven mark but closed little changed, down 2.8 points or 0.2%, to stay (narrowly) atop the 1,500 mark. The Nasdaq Composite (COMP) outperformed thanks to strength in some of its major components; the index closed 4.6 points higher, up 0.2%.

The CBOE Market Volatility Index (VIX) gained 5.3% on the day, as investors anticipated a week chock-full of news. After hitting an intraday peak of 13.91, the VIX closed up 0.7 point.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"When you consider how supposedly overbought the market is here, not to have much of a pullback on a slow news day is rather impressive," observed Detrick. "We saw mixed news today on the economic front, with strong durable-goods data but lackluster pending housing sales numbers. Still," he continued, "Caterpillar ( CAT ) reported earnings and had some positive things to say regarding demand for the second half of 2013. Right now, it is all about outlooks, and hopefully CAT has started a trend that we'll see throughout earnings season."

3 Things to Know About Today's Market :

  • Apple Inc. (AAPL) rolled out iOS 6.1, the operating system's first major update since September. Included among the new features is 4G LTE support for additional carriers. Meanwhile, the stock powered almost 2.3% higher as investors emerged for a little bargain hunting. (CNET)
  • Fitch Ratings said a downgrade of the U.S. credit rating is no longer imminent , thanks to the recent debt-ceiling agreement in Washington. The agency said policymakers now have room to concentrate on "substantive fiscal policy choices," with the fiscal-cliff and debt-ceiling crises currently averted. (Reuters)
  • Durable goods orders rose 4.6% in December, topping the expected increase of 1.8%. Excluding transportation numbers, orders were 1.3% higher last month, above estimates for a 0.7% increase. (NASDAQ)

5 Stocks We Were Watching Today :

  1. Nokia ( NOK ) strangle sellers expect limited volatility through the next several weeks.
  2. Yahoo! ( YHOO ) option players expressed bullishness ahead of the company's earnings report.
  3. Meanwhile, VMware (NYSE:VWM) saw put-buying activity before its earnings report.
  4. LinkedIn (LNKD) weekly option buyers expect new highs are on the horizon.
  5. Toyota Motor (TM) again ascended to first place among global automakers.

EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Strong durable-goods orders at home and supply concerns in the Middle East helped boost oil futures to a 19-week high, although the front-month contract pared some of its intraday gains. March futures added 56 cents, or 0.6%, to settle at $96.44 per barrel. Gold futures continued their downward trek, however, as the U.S. dollar gained strength. The February contract dropped $3.70, or 0.2%, to end the day at $1,652.90 an ounce.

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.

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This article appears in: Investing , Options

Referenced Stocks: AA , CAT , FB , NOK , YHOO

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