See-Saw Session Resolves to the Downside; Dow Drops 116

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"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 :

plus...
    Small business owners are cheerful, the Bank of Japan is unwavering, and Lululemon Athletica ( LULU ) put buyers are counting their winnings.

The 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%.

The 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 today's trading.

The 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.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

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 frustrated."

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. (FOX Business)
  • The National Federal of Independent Business (NFIB) reported that its index tracking small-business optimism rose to a 12-month high of 94.4 in May, up 2.3 points from the previous month. (Huffington Post)
  • 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 :

  1. Aggressive Groupon Inc (GRPN) bears scooped up out-of-the-money, front-month puts.
  2. These short-term Lululemon Athletica ( LULU ) put buyers had the right idea.
  3. Amazon.com (AMZN) bulls targeted short-term upside with weekly options.
  4. As the battle among its suitors continued, Sprint Nextel (S) enjoyed a price-target boost.
  5. AT&T (T) saw a rare round of put buying, as bearish speculators wagered on a bearish summer for Ma Bell.

EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

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.

SCHAEFFER'S MARKET POSTURE



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

Referenced Stocks: BAC , BBRY , LULU , QCOR , X

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