"The realization that the U.S. economy isn't going to go
straight off a cliff was a nice change," commented Schaeffer's
Senior Technical Strategist Ryan Detrick. "The ISM manufacturing
survey came in better than expected and actually showed growth in
September. Given all the gloom-and-doomers out there, today's news
helped us to have a rare 'up' Monday." Indeed, the
Dow Jones Industrial Average (DJI)
rallied more than 160 points at its session peak, knocking on the
13,600 doorstep.
Keep reading to see what else was on our radar today:
And now, a look at the numbers...
The
Dow Jones Industrial Average (DJI - 13,515.11)
climbed to an intraday best of 13,598.25 just before lunchtime, but
pared more than half of this gain by the closing bell. The
blue-chip barometer was limited by its 10-day moving average,
racking up a near 78-point, of 0.6%, rise. Only four of the Dow's
30 components landed in the red, with Microsoft Corporation (
MSFT
) 0.9% decline leading the way. On the other hand, UnitedHealth
Group Inc. (UNH) pace the 26 outperforming issues with a 1.9%
upswing.
S&P 500 Index (SPX - 1,444.49)
The
Nasdaq Composite (COMP - 3,113.53)
couldn't maintain its early lead, and fell just 2.7 points, or a
tenth of a percent. The tech-rich COMP did, however, found support
from its rising 32-day trendline.
The
CBOE Market Volatility Index (VIX - 16.32)
launched above its 50-day moving average today, adding 0.6 points,
or 3.8%.
Today's highlight
: "Forget the headlines, what I'm impressed with is yet another
company getting bought out at a massive premium," noted Detrick.
"3M Co (MMM) purchased Ceradyne, Inc. (CRDN) for a 43% premium.
Mergers and acquisitions activity is very longer-term bullish and
we continue to see some very nice deals getting done."
"These transactions show that companies are able to get
financing, which also suggests that credit markets are improving.
And at the same time, it shows that companies have the confidence
to actually step up and make a deal. So much of this rally has been
about improving confidence and this is another step in that
direction."
Turning to today's major market stories...
-
Option Trends
Amazon.com, Inc. (AMZN), Ciena Corporation (CIEN), and Regions
Financial Corporation (RF).
- International Business Machines Corp. (IBM), LDK Solar Co.,
Ltd (ADR) (LDK), and Visa Inc (V)
all notched record-breaking runs
in today's action.
- Bearish brokerage notes induced short call playing on
Baidu.com, Inc. (ADR) (BIDU)
, and an uptick in put volume on
Sprint Nextel Corporation (
S
)
.
- Telecom equipment concern
Aruba Networks, Inc. (ARUN)
and mobile phone business
Nokia Corporation (ADR) (NOK)
were tapped with analyst adjustments.
- Pre-earnings put playing ramped up on
Marriott International, Inc. (
MAR
)
.
- Option Volume Briefs: speculators wagered on short-term
declines for the
PowerShares QQQ Trust, Series 1 (ETF) (
QQQ
)
, and
Green Mountain Coffee Roasters Inc. (
GMCR
)
.
- What's the opposite of the XIV?
The VXX, of course
! ... Schaeffer's regular columnist Adam Warner has more.
For today's activity in commodities, options, and more, head
to page 2.
Oil futures turned higher for a third straight day, as the
commodity was buoyed by positive U.S. manufacturing data and a
slouching greenback. While equities rallied, November-dated crude
bumped up 29 cents, or 0.3%, to close at $92.48 a barrel.
The upbeat manufacturing report also boded well for gold
futures, lifting the commodity to its loftiest price since March. A
weaker dollar, as well as comments by Federal Reserve Bank of
Chicago President praising the latest round of QE3, solidified
gains for the precious metal. Against this backdrop, gold for
December delivery gained $9.40, or 0.5%, to settle at $1,783.30 an
ounce.
Levels to watch in trading...
-
Dow Jones Industrial Average (DJI - 13,515.11)
- support at 11,500; resistance at 14,000
-
S&P 500 Index (SPX - 1,444.49)
- support at 1,100; resistance at 1,500
-
Nasdaq Composite (COMP - 3,113.53)
- support at 2,400; resistance at 3,400
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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