"Well, we went nowhere for a week then jumped higher today,"
noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT.
"As I said yesterday, the old Wall Street adage is, 'Never short a
dull market.'" The
Dow Jones Industrial Average (DJI)
didn't manage to close atop the 13,600 level or achieve any new
milestones, but it did gain nearly 85 points today. "Although
earnings weren't that great," Detrick admitted, "a big drop in
initial jobless claims and very strong housing data was all it took
to have a nice rally."
Continue reading for more on today's market, including
- Reasons to target a
in Molycorp (
), from Senior Options Strategist Tony Venosa, CMT.
- Senior Trading Analyst Bryan Sapp offers an update on
levels to trade against
and manage risk."
- Bearish Nokia (
) option traders are (again) trying to
call a top
- Mixed earnings results from big banking names, option betting
ahead of an FDA verdict, and another astute observation from one
of our favorite Twitter users.
After peaking at 13,633.89 in the early afternoon, the
Dow Jones Industrial Average (DJI)
settled up 85 points, or 0.6%. The blue-chip index failed to hit a
new annual high on an intraday basis and missed closing at a new
multi-year high, as well. Of the 30 Dow components, 24 moved higher
today, led by Intel (
), which gained 2.6% ahead of tonight's earnings report. On the
down side, Bank of America (
) lost 4.2%.
S&P 500 Index (SPX)
, meanwhile, finally conquered its former peak and stretched to its
highest point in half a decade. By the close, the SPX was up 8.3
points, or 0.6%, and rallied as high as 1,485.16 during the
Nasdaq Composite (COMP)
advanced as well, gaining 18.5 points, or 0.6%, and getting within
53 points of its annual peak during intraday trading.
CBOE Market Volatility Index (VIX)
pegged another multi-year low of 13.16 during Thursday's trading
but managed to end modestly higher, up 0.2 point or 1.1%.
A Trader's Take
"I guess any time you make new highs in small-caps, mid-caps,
transportation stocks, and junk bonds, you'd have to consider that
a good day," remarked Detrick. "While we have noticed some definite
increases in overall optimism, in the end price is what matters,
and the charts still look rather bullish to me. Be careful,
though," he warned, "as we often pull back during the second half
of January, and various sentiment polls are becoming elevated in
terms of bullish sentiment. Still, you can't argue with the strong
price action and wide participation from a variety of sectors."
3 Things to Know About Today's Market
- Investors were cheered by two nuggets of economic news today.
First, the Labor Department announced a decline in weekly jobless
claims, which dropped by 37,000 to a seasonally adjusted 335,000.
This number was bigger news than usual, as it marked a five-year
low in the figure. Elsewhere, the Commerce Department reported a
12.1% increase in housing starts for December, marking a
seasonally adjusted annual rate of 954,000, or the highest point
since mid-2008. What's more, the upward swing was well above
analysts' expectations for a 3.4% rise.
- Banks had another big day in the earnings confessional, led
by mega-caps Citigroup (
) and BAC. The former fell notably short of analysts'
expectations amid what its CEO called a "challenging"
environment. BAC, meanwhile, exceeded consensus estimates but saw
its profit potential crimped by mortgage settlement
- In Washington, House Republicans are considering lifting the
U.S. debt ceiling on a temporary basis. Budget Committee Chairman
Paul Ryan, R-Wis., said a one-month extension would allow more
discussion time between the two chambers of Congress and the
White House. White House press secretary Jay Carney didn't appear
enthusiastic in response, referring to the short-term extension
... it's getting costlier to stay healthy. Unnaturally chilly
temperatures along the West Coast have had an ill effect on the
vegetable crop, and prices are rising as a result. Almost all of
the nation's supply of popular vegetables such as lettuce,
broccoli, cauliflower, and artichokes are grown in Southern
California and Arizona during the winter months. As this supply has
dropped, a price hike has naturally followed. Romaine lettuce
prices have nearly tripled this year, as have broccoli prices. The
recent cold snap could even result in a "critical" shortage of some
vegetables over the next few weeks, according to experts.
Today's Top Tweet
"Russell 2000, S&P Small-Cap 600 and S&P Mid-Cap 400
are all pointing towards all-time highs. In other news, DEBT
(Eddy Elfenbein), 11:54 a.m.
5 Stocks We Were Watching Today
- Put buyers are hoping for a
in Advanced Micro Devices (AMD).
- Option bulls
on NuPathe (PATH) ahead of a big FDA decision.
- Short-term General Electric (GE) calls were popular as
ahead of earnings.
- Cisco Systems (CSCO) was
at J.P. Morgan Securities this morning.
- Pessimism has begun to
in the Groupon (GRPN) option pits.
Question of the Day
: What is a good-til-canceled order?
: The good-til-canceled (GTC) order is yet another common variation
of the limit order. Unlike day orders, a GTC order will remain open
until it is either filled or canceled. If you anticipate it might
be a while until the stock reaches your target entry or exit point,
but you want to jump in as soon possible, this order is probably a
good choice for you. However, your order won't remain open
indefinitely; a common time frame for these orders to expire is 60
days, but check with your broker to be sure.
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures followed stocks higher today, in part due to a
hostage situation in oil-rich Algeria. February-dated futures ended
the session up $1.25, or 1.3%, at $95.49 per barrel. Gold futures
were also in the black, with the front-month contract adding $7.60,
or 0.5%, to settle at $1,690.80 per ounce.
At the end of every market day, the staff at Schaeffer's
Investment Research reviews the trading day in detail, covering
major events and key market developments. Don't miss this
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