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:
And now, a look at the numbers...
- 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
, but remained south of an important technical level.
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 (
) plummeting 4.7%
amid bribery allegations. On the other hand, Exxon Mobil (
) paced the advancing blue chips with a gain of 0.5%.
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,
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%.
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
: 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
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
For today's notable annual highs and lows,
At the end of every market day, the staff at Schaeffer's
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