Dow Tops 14,000 Again on Housing Data

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"All it took was some good housing data around 10 a.m. and we were off to the races," said Schaeffer's Senior Technical Strategist Ryan Detrick, CMT, as the Dow Jones Industrial Average broke back above 14,000 with the largest one-day gain since the first trading day of 2013, hitting a five-year high. "It was a week ago that we dropped after the Fed minutes were released and some feared the Fed would take away stimulus sooner rather than later. Well, [Federal Reserve Chairman] Ben Bernanke has since calmed those fears and we've had a big two-day rally as a result."

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

  • Schaeffer's Senior Options Strategist Tony Venosa, CMT, giving his eight reasons why Verizon Communications ( VZ ) is a strong candidate for a long trade.
  • Schaeffer's Senior Trading Analyst Bryan Sapp on trying to pick a winner in the ongoing battle between the bulls and the bears.
  • Our Weekly Contrarian: retailer Dick's Sporting Goods ( DKS ), which could very well be a "long distance runner."
plus...
  • The markets make it two days in a row with a furious rally, housing is on a serious rebound, and how an analyst upgrade for Google Inc ( GOOG ) sparked bullish option action.

Signs of strength in the housing market helped push the Dow Jones Industrial Average back over the magical 14,000 level, with the Dow gaining 175 points, or 1.3%, to finish at 14,075.37. It was the largest one-day gain since the Dow picked up 308 points on Jan. 2. Furthermore, the Dow touched a peak not seen since October 2007. Only one firm on the 30-company Dow declined, with advancers led by JPMorgan Chase ( JPM ), which picked up 3.5%. Hewlett-Packard ( HPQ ) was the only decliner, falling 0.1%.

The S&P 500 Index (SPX) also got back above its round-number threshold, climbing 19 points, or 1.3%, to close at 1,515.99. The Nasdaq Composite (COMP) gained nearly 33 points, or 1%, to finish at 3,162.26.

The CBOE Volatility Index (VIX) fell 2.1 points, or 12.7%, to close at 14.73.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"We've erased all of Monday's bloodbath and are once again very close to new all-time highs on most major averages," Detrick said. "But the bad news is that volume was once again rather light. The one big problem I have here is the down days have come on much higher volume than the up days. This shows there is some distribution going on under the surface."

3 Things to Know About Today's Market :

  • The number of Americans signing a contract to buy a house hit its highest mark since 2010, another sign that the housing market is on a rebound. (USA Today)
  • Former junk bond king Michael Milken might be in hot water again as he is under federal investigation for possibly violating his lifetime ban from the securities industry, sources said. (Fortune/CNN)
  • And on a lighter note, the annual "tooth fairy index" shows that parents are shelling out more for their kids' teeth, which previously has been positive news for the stock market. (CBS News)

5 Stocks We Were Watching Today :

  1. Google ( GOOG ) saw a notable pop in short-term call buying after some analyst upgrades and upward stock movement.
  2. Another state approved online gambling, and online gaming company Zynga (ZNGA) immediately saw a big uptick in both its share price and call buying.
  3. Online reservation system OpenTable (OPEN) also saw a lot of short-term call attention after an upgrade and a new annual high.
  4. One investor rolled back his call bets on US Airways Group (LCC) to a lower strike , perhaps because of the technical headwinds faced by the airline.
  5. Another trader pulled off a short straddle on clothier Michael Kors (KORS), betting the stock won't rise too much more than its current position in the next few months.

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 :

After hitting a new year-to-date low Tuesday, crude oil rebounded -- with April-dated oil futures up 13 cents, or 0.1%, at $92.76 per barrel.

But gold futures gave back some of the previous session's gains and closed back south of the $1,600 level as investors went back into the equities market. The April gold contract lost $19.80 on the day, shedding 1.2% to settle at $1,595.70 per ounce.

SCHAEFFER'S MARKET POSTURE

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This article appears in: Investing , Options

Referenced Stocks: DKS , GOOG , HPQ , JPM , VZ

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