"It was a tale of two days, really," quipped Schaeffer's Senior
Technical Strategist Ryan Detrick, CMT, of today's session, as the
Dow Jones Industrial Average (DJI)
explored a range of nearly 300 points before settling with a 0.5%
loss. "The morning started off great, as Fed Chairman Ben
Bernanke's testimony before Congress showed he was comfortable with
things. Then the Fed minutes came out in the afternoon, and things
weren't quite as clear ... Fed members seem to disagree on just how
soon to slow the asset purchases. Traders were left dazed and
confused in the span of just a few hours. Uncertainty leads to
selling, and that is what we got."
Continue reading for more on today's market, including
Ben Bernanke speaks, existing home sales improve, and General
) attracts option bulls after hitting a multi-year high.
At its highest point today, the
Dow Jones Industrial Average (DJI)
was up nearly 155 points to peg a new all-time apex of 15,542.40.
At its intraday nadir, the index was off almost 122 points, at
15,265.96. When the dust settled, the Dow was down 80.4 points, or
0.5%, at 15,307.17, maintaining its grip above its 10-day moving
average. Just seven Dow stocks managed to end the day higher, with
) leading the charge, up 1.8%. Pacing the lagging majority was
Cisco Systems (
), which dropped 2.8% on the day.
The day was similarly rocky for the
S&P 500 Index (SPX)
, which touched a new intraday peak of 1,687.18 and traded in a
nearly 40-point range before coming to a stop at 1,655.35, down
13.8 points, or 0.8%. Underperforming its index peers was the
Nasdaq Composite (COMP)
, which fell 38.8 points, or 1.11%, to settle at 3,463.30, a hair
below its respective 10-day trendline. The tech-laden index peaked
at a new 12-year high of 3,532.04 early this morning before the
sellers came in.
CBOE Market Volatility Index (VIX)
jumped 3.4%, or 0.5 point, amid the intraday market swing. Closing
at 13.82, the VIX settled at its highest point since May 1.
A Trader's Take
"We've mentioned this a lot the past few days, but the Russell
2000 Index (RUT) trading near 1,000 is very significant," continued
Detrick. "It took the S&P MidCap 400 Index (MID) 20 months to
get over that psychological level, and it took the Dow 16
to surmount it. With the RUT up there now and being firmly
rejected, you have to wonder if -- once again -- this big round
number will be trouble."
3 Things to Know About Today's Market
- All eyes and ears were focused on Federal Reserve Chairman
Ben Bernanke this morning, who confirmed the
central bank will not be quick
to abandon its bond-buying campaign (or raise interest rates), as
the U.S. economy remains in recovery mode.
Existing home sales
rose by 0.6% in April, to a seasonally adjusted annual rate of
4.97 million. This figure -- reported by the National Association
of Realtors -- was the highest reading since November 2009. On a
year-over-year basis, resales improved by 9.7%.
- Fed minutes showed
dissention in the ranks
, as a handful of Federal Open Market Committee (FOMC) members
want to tap the brakes on the last round of quantitative easing
as early as next month. Another wants to amplify the bond-buying
program, and others fall toward the middle in the battle between
hawks and doves.
5 Stocks We Were Watching Today
- General Electric (
) notched a
new multi-year high
, inspiring bullish option traders.
- One J.C. Penney Company (JCP) put buyer
may anticipate notable downside
over the next few weeks.
- An options speculator used calls and puts to
place a bearish bet
on Herbalife Ltd. (HLF).
- Barrick Gold Corporation (ABX) enjoyed
from call buyers.
- Sodastream International (SODA) was
smacked with a downgrade
at J.P. Morgan Securities.
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures turned south on Wednesday, pressured by
indications that the Fed may be ready to alter its accommodative
stance in the near future. Oil for June delivery dropped $1.90, or
2%, to close at $94.28 per barrel.
Gold also slipped, as speculation over an imminent QE3 slowdown
diminished demand for the metal as a currency hedge. June-dated
gold shed $10.20, or 0.7%, to finish at $1,367.40 per ounce.
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