"Disappointing trade data out of China was what had traders
talking today," observed Schaeffer's Senior Technical Strategist
Ryan Detrick, CMT. "As a result, Asian markets were hit hard, and
the materials group took a big dip also. In the end, after solid
gains last week, U.S. markets held up rather well, all things
considered." In fact, although the
Dow Jones Industrial Average (DJI)
was off nearly 119 points at its low-water mark today, it settled
with a loss of just 34 points.
Continue reading for more on today's market, including
Trading Topic of the Week
- Our CEO and founder Bernie Schaeffer
offers an important lesson
about year-to-date returns for broad-market indexes and precious
- Why Applied Materials, Inc. (
could end up benefiting
from an unwinding of skepticism.
- With the most recent jobs report behind us, Schaeffer's
contributor Adam Warner wonders about
volatility's next move
... Chinese trade data sparks global concern, winter weather
weighs on jobs numbers (and hamburger sales), and Bank of America
) options traders get active.
-- How to Interpret Short Interest:
Consider the short-to-float ratio
. By checking out a stock's short-to-float ratio, you can quickly
gauge how many traders are betting on the shares to drop.
Dow Jones Industrial Average (DJI - 16,418.68)
moved sharply lower out of the gate and bottomed at 16,334.20
around 11 a.m. ET. Buyers began to emerge in the afternoon hours,
however, and the blue-chip index closed with a loss of 34 points,
or 0.2%. Intel Corporation (
) rose 0.8% today, to lead the eight advancers on the Dow. The
Boeing Company's (
) 1.3% decline paced the index's 22 decliners.
S&P 500 Index (SPX - 1,877.17)
slumped into midday along with the Dow, but came within a chip shot
of a positive finish. By the closing bell, the index was off just
0.9 point, or close to 0.1%. The
Nasdaq Composite (COMP - 4,334.45)
also moved slightly lower, giving back 1.8 points, or less than
CBOE Volatility Index (VIX - 14.20)
edged higher, as the major market indexes explored negative
territory. By the closing bell, the market's "fear gauge" had added
0.1 point, or 0.6%.
A Trader's Take
"Interestingly, once again financials held tough," noted
Detrick. "The first two months of the year this sector lagged, but
all of a sudden they are holding up well here. We like to see that,
as leaders tend to take turns, versus seeing the whole market dump.
Right now, financials holding tough might be a sign that any
weakness could be shallow. Overall, the U.S. bucked some of the
weakness out of Asia. I hate to say it was just 'profit taking,' as
that sounds so cliché, but in the end the bears had a major chance
today and couldn't do much with it. Something else to consider is
that historically, the middle of March is a very strong time for
stocks. This is a rather light week on the economic front, so could
we see a continued moved higher? I sure wouldn't want to bet
5 Items on Our Radar Today
Disappointing trade data out of China
stoked concerns about an impending pullback in the world's
second-largest economy. Specifically, exports in the country
dropped 18.1% in February on a year-over-year basis. Some of the
backslide was attributed to the recent Lunar New Year holidays.
- Charles Plosser, president of the Philadelphia Fed, opined
jobs numbers from the past three months
were likely impacted by "the unusually severe winter weather." As
such, any perceived struggles in the labor market should be
(Reuters, via CNBC)
- McDonald's Corporation (
) dragged on the Dow today, after the fast-food giant reported
same-store sales dropped 1.4% domestically
last month, due in large part to the harsh winter weather.
Worldwide sales edged 0.3% lower, which could have repercussions
for the chain's first-quarter profit numbers.
Facebook Inc (FB)
earned another price-target hike on Wall Street today, but
options players have been growing increasingly skeptical.
- Options traders were out in full force in the
Bank of America Corp (
pits today, as a number of strikes were targeted by buyers and
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures were negatively impacted by the economic news out
of China, which sparked concerns about future energy demand. The
April-dated contract slipped $1.46, or 1.4%, to settle at
Gold futures bounced from an early morning loss as investors
digested the weaker-than-forecast Chinese export numbers. Gold for
April delivery rose $3.30, or 0.2%, to end the session at $1,341.50
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