Small-Caps Lead the Laggards as Intraday Volatility Continues

By
A A A

"We once again had a day full of intraday volatility capped off with underperformance by small-caps and technology stocks," said Schaeffer's Senior Equity Analyst Joe Bell, CMT, as the Dow Jones Industrial Average (DJI) notched a loss of nearly 99 points. "It's almost becoming a repeat every day, as strength is met with selling pressure and buyers come to the table to buy the dips. Once the dust settles, there hasn't been a ton of net movement for the Dow and S&P 500 Index (SPX) -- but under the surface, there was some real weakness."

Continue reading for more on today's market, including :

Trading Topic of the Week -- Tips for Buying Weekly Options: Look for a catalyst . Check the stock's fundamental, technical, and sentiment data to pinpoint possible triggers for a big move.

The Dow Jones Industrial Average (DJI - 16,268.99) gave up intraday support at 16,300 in the final half-hour of trading, eventually tumbling to a loss of 98.9 points, or 0.6%. Only four of the Dow's 30 components closed higher, led by a 1.5% gain for Merck & Co., Inc. ( MRK ). Microsoft Corporation (MSFT) paced the 26 decliners with a 1.4% deficit.

The S&P 500 Index (SPX - 1,852.56) was also smacked by the eleventh-hour sell-off, ending on a drop of 13.1 points, or 0.7%. However, the Nasdaq Composite (COMP - 4,173.58) fared even worse. By the time the closing bell sounded, the tech-heavy index was off 60.7 points, or 1.4%.

The CBOE Volatility Index (VIX - 14.93) jolted higher as stocks stumbled. After a wobbly start to the session, the VIX wrapped up the day on a gain of 0.9 point, or 6.5%.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"Durable goods orders improved in February after falling in January," noted Bell. "That was a nice upside surprise, but market participants will continue to monitor economic reports to see whether the improvement in weather will lead to a pick-up in economic activity. These reports are very important as investors continue to look for indications on just how soon the Fed might raise rates."

5 Items on Our Radar Today :

  1. U.S. orders for durable goods increased 2.2% last month compared to January, according to the Commerce Department. This was a welcome development for economists, as demand for long-lasting manufactured goods had declined in the two months prior to this latest report. However, optimism surrounding the data was tempered by an unanticipated 1.3% fall in orders for non-defense capital goods excluding aircraft, which are used to gauge future business spending. (Reuters)
  2. "Candy Crush" parent King Digital Entertainment Plc ( KING ) flopped in its initial public offering (IPO) , plummeting well below initial pricing levels to establish itself as the worst-performing IPO of 2014. However, CEO Ricardo Zacconi refused to let the setback temper his excitement, saying today was just "the start of a marathon." (CNBC)
  3. Despite its long-term technical strength, Under Armour Inc (UA) continues to face doubt in the options pits and beyond.
  4. Call buying accelerated on Apple Inc. (AAPL) as the stock added to its week-to-date gains.
  5. AOL, Inc. ( AOL ) options pits were flooded with call buyers as the stock continued to make headway.
  6. 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 :

    Crude futures ticked higher today on news of a substantial drop in domestic gasoline supplies. The May contract reclaimed the century mark for the first time in about two weeks, adding $1.07, or 1.1%, to end at $100.26 per barrel.

    Meanwhile, gold futures tagged a roughly six-week low as the U.S. dollar strengthened, with the April contract shedding $8.00, or 0.6%, to end at $1,303.40 per 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: TSLA , NFLX , KING , AOL , MRK

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

Stocks

Referenced

Most Active by Volume

56,834,794
    $15.52 unch
47,736,761
  • $94.72 ▲ 0.83%
41,992,984
  • $2.47 ▲ 11.76%
40,893,734
  • $34.7901 ▲ 2.14%
39,324,803
  • $69.27 ▼ 0.19%
39,276,613
  • $7.28 ▲ 2.68%
39,084,483
  • $44.83 ▼ 0.01%
33,527,212
  • $26.02 ▲ 0.15%
As of 7/22/2014, 04:03 PM