"A day after the huge Fed-induced rally, the market rested,"
said Schaeffer's Senior Technical Strategist Ryan Detrick, CMT.
"When you think about it, the fact that we didn't see a big
post-Fed hangover and sell-off is a welcome sign. During the year,
most Fed days have seen a sell-off, only to bounce back the next
day. Well, this time we had some big-time strength on the Fed, but
no next-day weakness. Could this be a small clue that we'll have a
Santa Claus rally to end the year?" Meanwhile, the
Dow Jones Industrial Average (DJI)
reached a new technical milestone, and finished modestly in the
Continue reading for more on today's market, including
Trading Topic of the Week -- Trading Low-Priced Options:
DON'T short-change yourself on time
. Compared to a front-month contract, an option with six months of
shelf life offers more time for the shares to move as you expect.
This extra time provides you with a little breathing room to allow
the predicted price move to play out.
Dow Jones Industrial Average (DJI - 16,179.08)
spent time on both sides of breakeven, but managed to touch a
record intraday peak of 16,194.72 during the afternoon hours. By
the time the dust settled, the Dow was up 11.1 points, or 0.1% --
marking another all-time closing high. The blue-chip bellwether's
12 advancers were led by Chevron Corporation's (
) 1.3% gain, while Microsoft Corporation (
) and Wal-Mart Stores, Inc. (
) paced the 18 decliners with losses of 0.9% each.
S&P 500 Index (SPX - 1,809.60)
dropped to a session low of 1,801.35 this morning, but narrowed its
losses to 1.1 points, or roughly 0.1%, for the day. Meanwhile, the
Nasdaq Composite (COMP - 4,058.13)
finished 11.9 points, or 0.3%, lower.
CBOE Volatility Index (VIX - 14.15)
was parked in negative territory during the early hours of trading,
but closed 0.4 point, or 2.5%, higher for the session.
A Trader's Take
"Another day, and more encouraging economic data," Detrick went
on. "The Philadelphia Fed and index of leading economic indicators
both showed economic improvement, but the one thing I was impressed
with was AK Steel Holding Corporation (AKS) upping its guidance.
This sparked a big rally in steel stocks. If the economy is truly
going to improve next year, sectors like steel will be big
benefactors. Lastly, tomorrow is December options expiration.
Remember to close out your trades, and hopefully you had some nice
5 Items on Our Radar Today
- The National Association of Realtors said
existing home sales
fell 4.3% in November to a yearly rate of 4.90 million -- marking
a third consecutive monthly drop, as well as their lowest level
in almost a year. Economists, on average, had expected a narrower
(Reuters via CNBC)
- According to the Labor Department,
initial jobless claims
climbed by a larger-than-anticipated 10,000 last week to a
seasonally adjusted 379,000 -- the highest number since March.
Meanwhile, the four-week moving average for first-time filings
climbed 13,250 to 343,250.
- The Conference Board's
index of leading economic indicators
rose 0.8% last month, compared to a 0.1% increase in October. The
latest figure -- which exceeded the consensus view -- suggests
"gradually strengthening economic conditions through early 2014,"
according to a Conference Board economist.
Ford Motor Company (
was hit with a round of bearish brokerage notes, following
yesterday's weak 2014 outlook.
- One call seller predicted a near-term ceiling for
Visa Inc (V)
, despite today's new all-time high.
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures advanced again, thanks to increased energy-demand
forecasts. By day's end, the January contract -- which expired
today -- tacked on 97 cents, or 1%, to finish at $98.77 per
Conversely, gold futures sank as investors digested the Federal
Reserve's tapering plans. February-dated gold shed $41.40, or 3.4%,
to end at $1,193.60 an ounce -- the lowest settlement for a most
active contract since August 2010.