Opening View: DJIA Poised to Make Run at 200-Day Moving Average

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The Dow Jones Industrial Average (DJIA) cheered a decline in weekly jobless claims and overlooked a need to raise capital among European banks on Thursday, allowing the blue-chip barometer to challenge resistance at its 200-day moving average. While the Dow was unable to make that final push and close above this key trendline, Wall Street appears ready to make a second attempt this morning, as futures on the DJIA and the S&P 500 Index (SPX) are trading roughly 17 points and 3.8 points above fair value, respectively. The positive bias comes even as President Obama prepares to give an 11 a.m. news conference, where traders will scrutinize any comments on the state of the economy. While the DJIA is currently challenging resistance in the 10,450 region, traders should keep an eye out for support in the 10,350 area, should things go south. Similarly, the SPX's levels to watch include support near 1,100 and resistance at 1,110.

On the sentiment front, we've noticed an interesting development in the Association for Individual Investors' weekly survey. Specifically, the bullish percentage jumped from 30.80% last week to 43.87% this week. This bullish reading represents the highest percentage since the week of April 15, or just before the SPX and DJIA set their highs for 2010.

Turning to equity news, shares of Nokia Corp. ( NOK ) are trading sharply higher in overseas activity, after the firm announced the appointment of a former Microsoft Corp. ( MSFT ) executive as its next CEO. In premarket trading on Wall Street, NOK was last seen up by 5.7%.

On the earnings front, BP plc ( BP ) announced that it is delaying the release of its third-quarter earnings report. The company now expects to report its results for the quarter on Nov. 2. BP offered no reason for the delay.

National Semiconductor ( NSM ) reported net income of $88.8 million, or 36 cents per share, as revenue rose 31% to $412 million. Analysts were looking for earnings of 34 cents per share on revenue of $415.6 million.

Finally, Smith & Wesson Holding Corp. ( SWHC ) said that its fiscal first-quarter profit declined to $6.2 million, or 10 cents per share. Revenue fell to $94.9 million from $101.7 million last year. Analysts estimated a quarterly profit of 5 cents per share on revenue of $95.6 million.

Earnings Preview

On the earnings front, Brady Corp. ( BRC ) and lululemon athletica inc. ( LULU ) will release their quarterly earnings reports today. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

There are no major economic reports scheduled for release today. Looking ahead to next week, the U.S. budget figures for August are due from the Treasury Department on Monday, while Tuesday offers up August retail sales and July business inventories. The New York Fed will release its report on September manufacturing activity on Wednesday, which will be accompanied by August's industrial production and the weekly report on U.S. petroleum supplies. We'll get the weekly report on new jobless claims on Thursday, as well as the producer price index for August and the Philadelphia Fed's manufacturing report. Finally, the Labor Department will deliver the August consumer price index on Friday, while the University of Michigan will give its first peek at consumer sentiment in September.

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 924,348 call contracts traded on Thursday, compared to 564,057 put contracts. The resultant single-session put/call ratio arrived at 0.61, while the 21-day moving average held at 0.63.

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

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Overseas Trading

Overseas trading has a bearish slant this morning, as only four of the 10 foreign indexes that we track are in positive territory. The cumulative average return, however, stands at a gain of 0.22%. In Asia, regional indexes finished broadly higher, as stocks gained ground following news that domestic demand remained strong in China despite Beijing's efforts to slow the economy. Specifically, China's August imports were up 35.2% year-on-year, compared to expectations for a rise of 25%. Elsewhere in the region, markets in Singapore, Malaysia, Indonesia, the Philippines, and India were closed for a public holiday.

Across the pond in Europe, the situation is not quite as rosy. Banking stocks are leading a broad retreat, after Deutsche Bank ( DB ) announced plans to raise more than $10 billion in capital through a stock offering. In economic news, the Office for National Statistics reported that the British producer price index (PPI) remained flat in August. The core PPI rose 0.1% in August, and was up 4.6% year-on-year.

Overseas markets

Currencies and Commodities

Despite selling off on Thursday in the wake of a surprise rise in weekly U.S. petroleum supplies, crude futures are bouncing back this morning. The most active contract has gained $1.55 to trade at $75.80 per barrel in electronic trading. Gold futures haven't been as lucky, with the lead contract up a mere 10 cents at $1,251 an ounce in London. Finally, the U.S. Dollar Index is trading fractionally lower, off 0.10% at 82.60.

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

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.



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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