Opening View: DJIA, SPX Trending Higher; VIX Back Below 20

By
A A A

The Dow Jones Industrial Average ( DJIA ) came roaring back yesterday, jumping back above the 11,150 area and challenging resistance at the 11,200 area. What's more, a positive reaction to today's report on advanced first-quarter gross domestic product could power the Dow to its ninth consecutive weekly win - last week the DJIA closed at 11,204.3. Meanwhile, the S&P 500 Index ( SPX ) reclaimed the 1,200 level and its 10-day and 20-day moving averages on Thursday. The broad-market index is once again faced with short-term resistance in the 1,210-1,215 area - the region that the SPX was battling prior to the Greece debacle. Heading into the open, futures on the DJIA and SPX are trading 28 points and 3.5 points above fair value. Finally, for all you VIX watchers out there, the CBOE Market Volatility Index ( VIX ) has retreated more than 23% during the past two trading days, erasing nearly all of Tuesday's 30% rally. In fact, the "fear" index is trading back below familiar resistance at its 20-week moving average and the round-number 20 level. The next potential layer of support lies in the 18 area, where the VIX's 10-week trendline resides. The index has still not closed a week above these trendlines since early February.

In earnings news, D.R. Horton Inc. ( DHI ) said it swung to a second-quarter profit of $11.4 million, or 4 cents per share, from a loss of $108.6 million, or 34 cents per share, in the year-ago period. Revenue was $896.8 million. Analysts were looking for a loss of 3 cents per share on revenue of $874.6 million. In pre-market trading, DHI is up 1.12%.

McAfee Inc. ( MFE ) said its first-quarter net income fell to $37.6 million, or 23 cents per share, from $53.5 million, or 34 cents per share, in the same period last year. Revenue rose 12% to $502.7 million. Excluding special items, McAfee said earnings were 60 cents per share. Analysts had expected a profit of 63 cents per share, and $513.1 million in revenue. MFE investors are not taking the miss very well, as the stock has plunged more than 11.5% in electronic trading.

Wynn Resorts ( WYNN ) earned $27 million, or 22 cents per share, in the first quarter, up from a loss of $33.8 million, or 30 cents per share, in the same quarter last year. On an adjusted basis, Wynn would have earned 26 cents per share. Revenue came in at $908.9 million. Analysts were expecting a profit of 17 cents per share on revenue of $851 million. Shares of WYNN have added about 0.43% in pre-market activity.

Earnings Preview

On the earnings front, Avon Products Inc. ( AVP ), Chevron Corp. ( CVX ), China Sunergy Co., Ltd. ( CSUN ), and Constellation Energy Group Inc. ( CEG ) are slated to release their quarterly earnings reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,784,070 call contracts traded on Thursday, compared to 893,542 put contracts. The resultant single-session put/call ratio arrived at 0.50, while the 21-day moving average held at 0.48.

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 has a positive bias this morning, as seven of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a gain of 0.31%. Asian markets ended mostly higher on Friday, as solid corporate earnings boosted Chinese banks in Hong Kong, while exporters rallied in Japan and South Korean following a strong finish on Wall Street. In Europe, regional indexes are trading in a tight range in midday activity, as investors wait for details on an aid package for Greece. Overseas market information comes to you courtesy of Schaeffer's Daily Bulletin .

Overseas markets

Currencies and Commodities

Reports that Greece may be near to accepting a deal to help ease its sovereign debt concerns has taken pressure off investors and all but eliminated demand for the U.S. dollar as a safe-haven investment. Furthermore, continued strength in the Japanese yen has applied additional pressure to the greenback. In pre-market trading, the U.S. Dollar Index is down 0.27% at 81.79. Gold futures are taking advantage of the dollar's weakness, rising $6.10 to $1,174.90 an ounce in London. Finally, crude futures have edged 20 cents higher to $85.37 in pre-market trading.

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

Click here for the new spring issue of SENTIMENT magazine



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.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.


This article appears in: Investing , Options


Schaeffer's Investment Research

Schaeffer's Investment Research
  • See all for Schaeffer's Investment Research
  • View Print Version

More from Schaeffer's Investment Research:

Related Videos

Living the Life of Pie
Living the Life of Pie              

Stocks

Referenced

Most Active by Volume

45,219,355
  • $62.07 ▼ 2.91%
17,983,962
  • $15.39 ▼ 1.35%
11,887,161
  • $63.67 ▼ 2.00%
10,139,048
  • $94.23 ▼ 1.22%
8,858,763
  • $32.719 ▲ 0.18%
8,252,028
  • $94.07 ▼ 0.94%
8,071,059
  • $3.33 ▼ 0.60%
7,407,871
  • $37.35 ▼ 1.87%
As of 7/10/2014, 10:12 AM