Opening View: DJIA Bulls Will Try Again After Monday Smackdown

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Despite rallying more than 100 points early in the session, the Dow Jones Industrial Average ( DJIA ) flopped in afternoon trading, shedding roughly 20 points and closing back below the 10,200 level. The Dow continues to find resistance at its 10-month moving average, which is currently resting just below 10,300, while support can loosely be defined by the 10,000 and 9,800 levels. Meanwhile, the S&P 500 Index ( SPX ) was neatly rejected by its 200-day moving average on Monday. This trendline is currently hovering just below the 1,110 area, while support could emerge near the 1,080 or 1,060 levels. Heading into the open, we are seeing a positive bias similar to yesterday morning, with futures on the DJIA and the SPX trading 51 points and 6 points above fair value, respectively. Finally, I should point out that the end of the week brings about "triple witching," when equity options, stock index options, and stock futures contracts expire simultaneously. According to Todd Salamone in this week's Monday Morning Outlook , 71% of the 17 triple-witching expiration weeks since 2006 have produced positive returns, though only 40% of June triple-witching expiration weeks have been positive, with the average loss totaling about 2%."

In earnings news, FactSet Research Systems Inc. ( FDS ) reported third-quarter net income of $38.7 million, or 81 cents per share. Excluding a one-time gain of 3 cents per share, FactSet earned 78 cents per share, as revenue rose 4% to $160.3 million. Looking ahead, the firm sees fourth-quarter earnings of 78 cents to 80 cents per share, including a charge of a penny per share.

Finally, the hits keep coming for BP plc ( BP ). This morning, Fitch Ratings downgraded BP's credit rating to BBB from AA, and put the company on negative watch. The ratings firm cited the recent push by U.S. authorities for BP to escrow significant funds preemptively, ahead of any agreed claims process, as well as recent indications that U.S. government scientists have uncovered a significantly higher spill rate than previously announced.

Earnings Preview

On the earnings front, Best Buy Co., Inc. ( BBY ) is slated to report is quarterly figures today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

The economic calendar offers up the Empire State Manufacturing Index for June as well as May's import/export data. Wednesday brings the release of weekly crude inventories, May housing starts, the May Producer Price Index ( PPI ) and core PPI, and May industrial production data. Thursday will be chock full of economic data. Traders will get a look at initial jobless claims, the May Consumer Price Index ( CPI ) and core CPI, the Conference Board's leading indicators index for May, and the Philadelphia Fed Index for June. Friday closes with no major economic reports.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,183,695 call contracts traded on Monday, compared to 700,951 put contracts. The resultant single-session put/call ratio arrived at 0.59, while the 21-day moving average held at 0.67.

Volatility indices

NYSE and Nasdaq summary

**The volume data shown above is from the Nasdaq and NYSE exchanges only. It does not include regional volume activity, which means that other daily volume quotes you see may be higher.**

Dow, S&P and Nasdaq futures

Every morning, our research staff analyzes the prior day and the overnight markets, and monitors the morning wires to give you an accurate preview of the day to come. If you enjoyed today's edition of Opening View, sign up here for free daily delivery, straight to your inbox, before the opening bell.

Overseas Trading

Overseas trading is in good shape this morning, as nine of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.33%. In Asia, stocks remained range-bound in cautious trading following Moody's downgrade of Greece's debt to junk status. Meanwhile, European shares bounced back from early losses, but banking stocks remained among the biggest losers. Overseas market information comes to you courtesy of Schaeffer's Daily Bulletin .

Overseas markets

Currencies and Commodities

With confidence growing in the U.S. and overseas, traders are forsaking safe-haven investments and turning toward riskier options. For instance, the U.S. Dollar Index has dipped 0.10% to 86.42 in pre-market trading, with the euro gaining ground. Meanwhile, gold futures are basically flat this morning, with the most active contract down 20 cents at $1,224.30 an ounce in London. Crude, however, has taken off in pre-market trading. The lead contract has gained more than 75 cents, or 0.98%, to trade at $77.03 in electronic trading this morning.

Currencies and commodities

Unusual Put and Call Activity:

For an explanation of how to use this information, check out our Education Center topics on Option Volume and Open Interest Configurations .

Unusual options activity - puts

Unusual options activity - calls

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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


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42,340,022
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34,178,145
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34,028,998
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32,055,708
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31,539,235
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    $34.25 unch
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