"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,
why Verizon Communications (
) 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.
retailer Dick's Sporting Goods (
), which could very well be a "long distance runner."
- 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 (
) 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 (
), which picked up 3.5%. Hewlett-Packard (
) was the only decliner, falling 0.1%.
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.
CBOE Volatility Index (VIX)
fell 2.1 points, or 12.7%, to close at 14.73.
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.
- Former junk bond king Michael Milken might be in hot water
again as he is under
for possibly violating his lifetime ban from the securities
industry, sources said.
- 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.
5 Stocks We Were Watching Today
- Google (
) saw a
in short-term call buying after some analyst upgrades and upward
- Another state approved online gambling, and online gaming
company Zynga (ZNGA) immediately saw a
in both its share price and call buying.
- Online reservation system OpenTable (OPEN) also saw a lot of
short-term call attention
after an upgrade and a new annual high.
- One investor rolled back his call bets on US Airways Group
a lower strike
, perhaps because of the technical headwinds faced by the
- 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.
For a look at today's options movers and commodities
activity, head to page 2.
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.
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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