"One thing is for sure -- the volatility that Japan has been
seeing in their currency, bond, and equity markets has been
spilling over to global markets," noted Schaeffer's Senior
Technical Strategist Ryan Detrick, CMT. "Today, we had a big drop
early, bounced back to green before lunch, and then saw another
sizable drop later in the day." The
Dow Jones Industrial Average (DJI)
traded in a roughly 165-point range and peeked into positive
territory very briefly, before ending more than 100 points lower.
Continue reading for more on today's market, including
Small business owners are cheerful, the Bank of Japan is
unwavering, and Lululemon Athletica (
) put buyers are counting their winnings.
Dow Jones Industrial Average (DJI)
is back below its 10-day moving average after two days on the north
side of this trendline. Although the index closed shy of its
intraday nadir, it did swallow a loss of 116.6 points, or 0.8%, to
settle at 15,122.02. Just three Dow names managed to move higher
today, with UnitedHealth Group (UNH) up a whopping 0.4% to claim
the top spot. Pacing the declining majority was American Express
(AXP), which dropped 2.3%.
S&P 500 Index (SPX)
dropped as well, ending the session off 16.7 points, or 1%, at
1,626.13, not far from its intraday low. The
Nasdaq Composite (COMP)
also fell, surrendering 36.8 points, or 1.1%, to close at 3,436.95.
The SPX and COMP both slipped back below their 10-day trendlines in
CBOE Market Volatility Index (VIX)
rallied sharply as a result, gaining 1.6 points, or 10.6%, to
settle at 17.07. The close was just shy of the VIX's intraday peak
of 17.14. Mirroring its index counterparts, the VIX managed to
retake its 10-day moving average with today's bounce.
A Trader's Take
"So far in June, there have been seven trading days, and six of
them have seen at least a 100-point intraday move in the Dow,"
Detrick added. "Compare that with just 21 100-point intraday swings
in the first 60 days of 2013. I keep hearing about the big 'June
Swoon' that is coming, but I still feel June will be more of a
choppy frustrating mess than a big drop. So far that is exactly
what we've seen, as both bulls and bears are getting pretty
3 Things to Know About Today's Market
- The Bank of Japan (BoJ)
made no changes
to its current monetary policy, keeping interest rates and
asset-buying efforts unchanged. BoJ Governor Haruhiko Kuroda did
leave the door open for future modifications, should borrowing
costs show signs of destabilization. While the (lack of a) move
was largely expected, Japanese stocks dropped overnight, setting
the stage for U.S. equities to follow suit.
- The National Federal of Independent Business (NFIB) reported
index tracking small-business optimism
rose to a 12-month high of 94.4 in May, up 2.3 points from the
Electronic Entertainment Expo (E3)
kicked off today in Los Angeles. Among the anticipated product
debuts are new videogame consoles from Sony Corporation (SNE) and
Microsoft (MSFT) -- the PlayStation 4 and Xbox One, respectively.
(Los Angeles Times)
5 Stocks We Were Watching Today
Groupon Inc (GRPN)
bears scooped up out-of-the-money, front-month puts.
- These short-term
Lululemon Athletica (
put buyers had the right idea.
bulls targeted short-term upside with weekly options.
- As the battle among its suitors continued,
Sprint Nextel (S)
enjoyed a price-target boost.
saw a rare round of put buying, as bearish speculators wagered on
a bearish summer for Ma Bell.
For a look at today's options movers and commodities
activity, head to page 2.
A lackluster monthly outlook from the Organization of the
Petroleum Exporting Countries (OPEC) had a negative impact on oil
prices today, but crude did manage to bounce back from its intraday
low of $94.04 per barrel. At the close, July-dated oil was off 39
cents, or 0.4%, to settle at $95.38 per barrel.
Gold also managed to pare some of its losses by the day's
conclusion, but still ended solidly in the red. After touching the
$1,364.50 level -- a nearly two-month low -- intraday, August gold
futures settled off $9, or 0.6%, at $1,377 an ounce.