"The headlines may tell you that a slowdown in China was the
driver for the market's biggest drop since June," noted Schaeffer's
Senior Technical Strategist Ryan Detrick, CMT. "I'm not totally
buying that, but whatever the true reason -- China, emerging market
currencies, weak U.S. economic data, a blah earnings season so far,
or simply it is time for a break -- the bears took charge today in
a big way." The
Dow Jones Industrial Average (DJI)
moved sharply lower, losing its grip on the psychologically
significant 16,000 mark and turning in a weekly loss of 3.5%.
Trading Topic of the Week
Continue reading for more on today's market, including
-- Trading Stock Trends:
Consider at-the-money option plays.
At-the-money options let you maximize your profit potential by
reducing your upfront costs -- and tapping into the power of
Dow Jones Industrial Average (DJI - 15,879.11)
suffered a triple-digit decline for the second day in a row,
bringing an end to its worst week since May 2012. By the time the
closing bell mercifully sounded, the blue-chip index was at its
intraday low, down 318.2 points, or nearly 2%, closing south of
16,000 for the first time since Dec. 17. Week-over-week, the Dow
dropped 3.5%. Just three Dow components managed to move higher on
the day, including Microsoft Corporation (
), which added 2.1%. General Electric Company (
) brought up the rear, shedding 3.4%.
Things weren't much better for the
S&P 500 Index (SPX - 1,790.29)
which ended below the 1,800 mark for the first time since Dec. 17.
On the day, the SPX logged a drop of 38.2 points, or 2.1%. The
Nasdaq Composite (COMP - 4,128.17)
shed 90.7 points, or 2.2%. The SPX lost 2.6% for the week, while
the COMP surrendered 1.7%.
CBOE Volatility Index (VIX - 18.14)
spiked 4.4 points, or 31.7%, to settle at its highest level since
Oct. 15. This week, the market's fear barometer added a whopping
A Trader's Take
"Sure this week was ugly, and will go down as one of the worst
weeks in a long time," Detrick said. "The one 'positive' for the
bulls is the SPX is now down two weeks in a row. It hasn't been
lower three weeks in a row for 88 straight weeks. Going back 40
years, this record is second only to 107 weeks that ended back in
1996. In other words, the bulls have consistently stepped up in
this situation, and the last week of January is historically rather
bullish. The bottom line is: we could get a much better feel for
this sell-off after next week is in the books."
5 Items on Our Radar Today
- Much of today's sell-off was attributed to a
drop in emerging market assets
, as tapering worries emerged ahead of next week's Fed meeting.
Local currencies in Turkey and Argentina took notable beatings,
as did the Indian rupee.
- The Procter & Gamble Company (PG) announced a slight
pullback in fiscal second-quarter earnings, but the figure still
managed to top analysts' expectations. Revenue, however,
fell slightly short of the mark
. Fellow Dow component Microsoft Corporation (
) announced sales and earnings per share that
exceeded the Street's estimate
, amid strong performance in the Xbox division.
(Associated Press via ABC News; Yahoo! Finance)
Google Inc (GOOG)
scored a $220 price-target hike ahead of today's open.
- A large-scale put seller bet on intermediate-term support for
Ford Motor Company (F)
- Options speculators targeted both sides of the fence in
Zynga Inc (
today, with one group of traders betting on a near-term
For a look at today's options movers and commodities
activity, head to page 2.
Crude futures slumped on the day, but gained ground on the week.
In today's session, the March contract gave back 68 cents, or 0.7%,
to settle at $96.64 per barrel. Week-over-week, the commodity rose
2.4% when comparing most-active contracts.
Gold futures edged higher on the day, as investors sought out
"safe havens" amid foundering equities. February-dated gold added
$2, or 0.2%, to close at $1,264.30 an ounce. The precious metal
gained ground for the fifth week in a row, rising roughly 1%.
All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.