"The selling that started yesterday afternoon continued today
... and once again, small-caps and tech were hit hard, while the
more defensive areas held up better," said Schaeffer's Senior
Technical Strategist Ryan Detrick, CMT, of today's trading, which
Dow Jones Industrial Average (DJI)
decline for the second consecutive day -- the biggest two-day
selloff since November. "Say what you want, but that isn't the
normal mixture in a healthy market."
Continue reading for more on today's market, including
- Senior Options Strategist Tony Venosa, CMT,
has 10 reasons
why Morgan Stanley (
) is a good straddle trade candidate.
- Senior Trading Analyst Bryan Sapp on how
this week's market slide
"was exacerbated by negative news," and why Kohl's (
) could be good short play.
- More news about
bullish option trading
on Tesla Motors (
) in the face of disappointing earnings and a lot of turmoil on
- Mixed economic data on housing, jobs and pricing, the markets
continue their slide, and how bulls continue to pull for online
gaming concern Zynga (
Markets got hammered for the second straight day, with
discouraging job market news helping prolong Wednesday's sell-off
to send the
Dow Jones Industrial Average
down nearly 47 points, or 0.3%, to close at 13,880.62. Only nine of
the 30 companies on the Dow advanced, led by computer maker
Hewlett-Packard Company (
), which climbed 2.4%. The 20 decliners were led by Bank of America
(BAC), which dropped 3.2%. Chevron Corporation (CVX) finished
S&P 500 Index (SPX)
also fell, dropping nearly 10 points, or 0.6%, to close at
1,502.42. The index did stay above the 1,500 mark for the 12th
consecutive session, however, albeit by a hair, and it did breach
the round-number level in intraday trading. The
Nasdaq Composite (COMP)
fell nearly 33 points, or 1%, to finish at 3,131.49.
CBOE Volatility Index (VIX)
continued its upward run for the second day, jumping 0.5 point, or
nearly 3.7%, to close at 15.22, the first time the VIX has closed
above 15 since Dec. 31.
A Trader's Take
"What really caught my attention today was the action in the
CBOE Market Volatility Index (VIX)," Detrick said. "It spiked
nearly 30% in two days on just a 2% pullback in the S&P 500
Index (SPX). Everyone was asking, 'where's the fear?' Well, all it
took was a quick drop, and we saw a near-historical spike in the
VIX relative to the sell-off."
3 Things to Know About Today's Market
- Existing home sales
, with real estate agents citing a low inventory, as well as the
slow economic recovery.
- But in some discouraging economic news, new jobless claims
shot up in January
, a sign that job growth remains sluggish.
(The Washington Post)
- Inflation continued to
remain at bay
in January according to the latest Consumer Price Index released
by the U.S. Labor Department, but that could change in coming
5 Stocks We Were Watching Today
- Electronics retailer Best Buy (BBY) has gotten
from Wall Street analysts lately, and bullish option traders paid
- Call option volume
for online game maker Zynga Inc (
) despite today's pullback in the shares.
- Bears are
Bank of America (BAC) to counter its current uptrend and head
lower in the near term.
- Wal-Mart Stores (WMT) turned in strong fourth-quarter
ruining the plans
of some put traders looking for the shares to drop.
- Optimistic call traders were
hoping for a boost
for Hewlett-Packard Company (
) after it releases its earnings tonight.
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures dropped again on Thursday, hitting their lowest
settlement point so far this year as the dollar gained and
stockpiles increased. April oil futures dropped $2.38, or 2.5%, to
$92.84 per barrel.
Gold, however, rose on the day after five consecutive sessions
in the red. But the gains were far from impressive, as April gold
futures added 60 cents to settle at $1,578.60 per ounce.
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
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