Dow Tumbles 102 Points, But 'Neckline' Holds Up to Euro-Zone Woes

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It was a rough start to the week for the Dow Jones Industrial Average (DJI), with the index plummeting to a triple-digit loss within minutes of the opening bell. "Overnight action in Asia and Europe contributed to an ugly open for U.S. markets," noted Senior Options Strategist Tony Venosa. "China stocks were weaker due to manufacturing data, which continues to show a decline in overall activity. Meanwhile, Europe saw heavy selling amid political uncertainty in France and the Netherlands."

Keep reading to see what else was on our radar today:

  • The growing buzz about a potential reversal pattern for the Dow should pique the interest of contrarians.
  • One relatively obscure volatility indicator is flashing a warning sign for stocks .
  • To navigate a choppy market , options players may need to adjust their holding periods.
  • The VIX gapped higher , but remained south of an important technical level.
And now, a look at the numbers...

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ


The Dow Jones Industrial Average (DJI - 12,927.17) gave up 102.1 points, or 0.8%, recovering from its intraday deficit of nearly 184 points. The Dow found an intraday foothold at its 80-day moving average, located in the 12,850 neighborhood. All but three of the Dow's 30 components closed in the red, with Wal-Mart Stores ( WMT ) plummeting 4.7% amid bribery allegations. On the other hand, Exxon Mobil ( XOM ) paced the advancing blue chips with a gain of 0.5%.

The S&P 500 Index (SPX - 1,366.94) gave up 11.6 points, or 0.8%, by the time the closing bell sounded. The SPX bottomed out today around the 1,360 level , which could play a crucial role as support this week. Finally, the Nasdaq Composite (COMP - 2,970.45) lost its grip on the 3,000 area, ending the session on a drop of 30 points, or 1%.

The CBOE Market Volatility Index (VIX - 18.97) gapped higher this morning, but quickly retreated from an early surge above the 20 level. The "fear index" finished up 8.8%, ending a two-session streak beneath its 10-day moving average. On an intraday basis, the VIX topped out at 20.27, comfortably below its April 10 peak at 21.06 .

Today's highlight : Even though the major equity indexes plummeted right out of the gate, "The market did not close on the lows of the day," observed Venosa. "In fact, most indexes closed near their highs of the day, which shows an ability to shake off the global concerns we faced this morning."

Turning to today's major market stories...

For today's activity in commodities, options, and more, head to page 2.

Crude oil slipped today, weighed down by weak economic data out of China and the euro zone. June-dated oil futures wrapped up the day with a loss of 77 cents, or 0.7%, at $103.11 per barrel.

Gold futures tumbled to a two-week low, tracking weakness in oil and equities as the U.S. dollar rallied. Gold for June delivery gave up $10.20, or 0.6%, to finish at $1,632.60 per ounce.

Levels to Watch in Trading :

  • Dow Jones Industrial Average (DJI - 12,927.17) - support at 11,500; resistance at 14,000
  • S&P 500 Index (SPX - 1,366.94) - support at 1,100; resistance at 1,500
  • Nasdaq Composite (COMP - 2,970.45) - support at 2,400; resistance at 3,400

OUTPERFORMING AND UNDERPERFORMING SECTORS

STOCKS - MOVERS

STOCKS - EARNINGS

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

For today's notable annual highs and lows, click here .

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: ATR , BA , JNPR , WMT , XOM

Schaeffer's Investment Research

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