Opening View: Will the DJIA's Friday Sell-Off Translate Into a Monday Rally?

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The Dow Jones Industrial Average ( DJIA ) finished comfortably in positive territory for the week on Friday, but the blue-chip barometer's weakness heading into the weekend was a source of concern for many. The DJIA enters this week hovering potential support in the 10,600 area, which is home to its 20-week moving average, while resistance lies overhead in the 10,800 region, site of the Dow's 10-week trendline. As for the S&P 500 Index ( SPX ), the broad-market index failed to overcome its weekly moving averages last week, but the SPX is holding firm above the 1,120 level and its 160-day trendline. Heading into the open, futures on the DJIA and the SPX are trading roughly 26 points and 4 points above fair value, respectively. Finally, it seems that Schaeffer's Quantitative Analyst Chris Prybal's research held true on Friday , with the market selling off heading into the weekend once again this year. All that's left is for the SPX to rally today to confirm the trend.

In earnings news, Lowe's Companies Inc. ( LOW ) said Monday its first-quarter profit rose to $489 million, or 34 cents per share. Analysts were looking for earnings of 31 cents per share. Sales climbed 4.7% to $12.4 billion, while same-store sales rose 2.4%. Looking ahead, LOW predicted earnings in the range of 57 cents to 59 cents per share, falling shy of analyst expectations for 61 cents per share. In pre-market trading, LOW is down 2.26%.

Finally, Sirius XM Radio Inc. ( SIRI ) lifted its 2010 adjusted sales target to $2.75 billion. The company now expects net subscriber additions for the full year to be approximately 750,000. Furthermore, SIRI said its sees 2010 free cash flow exceeding $100 million. The stock was up more than 5% in pre-market trading.


Earnings Preview

On the earnings front, Agilent Technologies Inc. ( A ) and SINA Corp. ( SINA ) are slated to release their quarterly earnings reports. Keep your browser at SchaeffersResearch.com for more news as it breaks.

Economic Calendar

PPI CPI

Market Statistics

Equity option activity on the Chicago Board Options Exchange ( CBOE ) saw 1,669,238 call contracts traded on Friday, compared to 1,174,989 put contracts. The resultant single-session put/call ratio arrived at 0.70, while the 21-day moving average rose to 0.58.

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 mixed this morning, as five of the 10 foreign indexes that we track are in positive territory. The cumulative average return on the collective stands at a loss of 0.72%. In Asia, stocks slipped, as concerns over the long-term health of the euro zone and weak U.S. earning forecasts dampened investor appetite for risk. Meanwhile, stocks in Shanghai plunged on concerns that Beijing may implement additional tightening measures to curb rising property prices. On the other hand, European shares rose, with BP gaining on action to stop an oil leak, though worries persisted about the euro zone sovereign debt crisis, and the euro fell to a four-year low. Overseas market information comes to you courtesy of Schaeffer's Daily Bulletin .

Overseas markets

Currencies and Commodities

Last week, the euro plunged to its lowest levels since the Lehman Brothers Holdings Inc. collapse almost two-years ago, but the European currency is bouncing back a bit this morning. That said, the U.S. dollar has remained strong against the yen and its other major rivals this morning. Heading into the open, the U.S. Dollar Index is up 0.61% at 86.62. Meanwhile, gold futures are treading water at $1,227.80 an ounce in London, as the greenback and the euro gain strength. Finally, crude futures remain weak, with the most active contract slipping to $75.42 per barrel in electronic 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

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This article appears in: Investing , Options


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As of 12/19/2014, 04:15 PM


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