The Dow Jones Industrial Average's (
DJIA
) trading range between the 11,200 and 11,000 levels ended in
dramatic fashion yesterday, with the Dow plummeting 225 points to
its biggest loss in three months. The DJIA's decline held in the
10,900 area, which is home to its rising 10-week moving average.
Look for this area to hold as support, while the 11,000 region
could emerge once again as a source of short-term resistance. The
S&P 500 Index (
SPX
), meanwhile, is currently perched on support near 1,170, with
potential resistance near the 1,185 level, which is home to the
index's 160-week trendline. Heading into the open, futures on the
DJIA and the SPX are trading down 14 points and up 0.5 point,
respectively, as traders prepare for a peek at the U.S. employment
situation. Finally, the CBOE Market Volatility Index (
VIX
) soared more than 18% yesterday, marking the index's seventh
straight absolute move in excess of 5%. According to Senior
Quantitative Analyst Chris Prybal, the VIX has accomplished this
feat only five other times since 1990. Furthermore, Chris says that
the SPX's average return following this signal is below average
"when you look out five to 21 days, historically," when compared to
returns since 1990.
In earnings news, Time Warner Inc. (
TWX
) reported first-quarter adjusted earnings of 61 cents per share,
as revenue rose to $6.32 billion. Analysts were expecting earnings
of 49 cents per share on $6.38 billion in revenue. The company said
it expects 2010 adjusted earnings to rise between 14% and 17% over
its 2009 adjusted earnings of $1.83 per share. TWX shares are up
nearly 3% in pre-market trading.
Chesapeake Energy Corp. (
CHK
) posted first-quarter earnings of $524 million, or 82 cents per
share, excluding items. Revenue increased to $2.8 billion from $2
billion. Analysts had forecast the natural gas company to earn 68
cents per share on revenue of $2.05 billion. In electronic trading,
CHK has edged nearly 1% higher.
Finally, Garmin Limited (
GRMN
) said that its first-quarter earnings were 38 cents per share, on
a pro forma basis, with revenue falling 1% to $431 million. Wall
Street was looking for earnings of 42 cents per share. Following
the report, GRMN has plummeted nearly 13% in electronic
trading.
Earnings Preview
On the earnings front, Allegheny Energy Inc. (
AYE
), Alpha Natural Resources Inc. (
ANR
), American Financial Group (
AFG
), BMC Software Inc. (
BMC
), Brightpoint Inc. (
CELL
), CBS Corp. (
CBS
), Vale S.A. (
VALE
), Prudential Financial Inc. (
PRU
) and Quest Software Inc. (
QSFT
) 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 1,892,800 call contracts traded on Tuesday, compared to
1,263,154 put contracts. The resultant single-session put/call
ratio arrived at 0.67, while the 21-day moving average rose to 0.50
- its first advance since April 16.
**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.**
Every morning, our research staff analyzes the prior day and
the overnight markets, and monitors the morning wires to give you
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Overseas Trading
Overseas trading is in poor shape this morning, as only one of
the 10 foreign indexes that we track is in positive territory. The
cumulative average return on the collective stands at a loss of
0.51%. In Asia, stocks closed in the red amid growing skepticism
about Greece's ability to carry out austerity measures, while fears
heightened that debt woes could spread to other countries such as
Spain and Portugal. Japanese financial markets are closed for the
Golden Week holidays, while South Korean financial markets are
closed for the Children's Day holiday. Meanwhile, European shares
are little changed after sharp losses in the previous session, with
robust earnings from Societe Generale limiting losses in banks hurt
by the euro zone sovereign debt crisis. Overseas market information
comes to you courtesy of
Schaeffer's Daily Bulletin
.
Currencies and Commodities
The U.S. dollar is on the march higher once again, as the euro
tagged an annual low versus the greenback in overnight trading.
Heading into the open, the U.S. Dollar Index is up 0.38% at 83.62.
Once again, the combination of a strong dollar and concerns over
today's supply data has crude futures falling back. Specifically,
the most active contract had dropped $1.10 to $81.64 per barrel in
electronic trading. Finally, gold futures have lost some of their
luster this morning, with the malleable metal dipping $2.30 to
$1,166.90 an ounce in London.
Unusual Put and Call Activity:
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topics on
Option Volume
and
Open Interest Configurations
.
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