The Dow Pares Early Gains but Finishes North of Breakeven


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The Dow Jones Industrial Average (DJI) notched a 26-point win today, although it was hardly applause-worthy, considering yesterday's steep decline. "We actually got some pretty decent economic data this morning. Between the durable goods orders and initial jobless claims, both were better than expected," said Schaeffer's Senior Equity Analyst Joe Bell. "Unfortunately, it doesn't seem like that was enough for the market, and many investors will be looking for stronger earnings reports than they have been getting."

Keep reading to see what else was on our radar today:

Chart of the Day : Schaeffer's Senior Options Strategist Tony Venosa, CMT shows nine reasons why Perfect World Co. (PWRD) looks like a profitable bullish trade setup .

And now, a look at the numbers...



The Dow Jones Industrial Average (DJI - 13,103.68) shot to an intraday peak of 13,164.52 right out of the gate this morning, but pared its gains throughout the day to spend much of the afternoon hovering around breakeven. By the time the closing bell rang, the blue-chip barometer was up 26.3 points, or 0.2%, finishing back atop the 13,100 level. The Procter & Gamble Company ( PG ) led the Dow's 18 advancers with a gain of 2.9%, while The Boeing Company ( BA ) led the 11 laggards with a 1.6% decline. General Electric Company ( GE ), however, remained unchanged.

The S&P 500 Index (SPX - 1,412.97) and Nasdaq Composite (COMP - 2,986.12) also claimed slight victories, as both mimicked the Dow's early advance before heading south later in the day. The SPX managed to reclaim its 80-day moving average, tacking on 4.2 points, or 0.3%. Meanwhile, although the COMP's 200-day moving average continued to act as support, the index notched a second consecutive finish below 3,000, adding 4.4 points, or 0.2%.

The CBOE Market Volatility Index (VIX - 18.12) fell 0.2 point, or 1.2%, but remained north of the 18 mark, as well as its 200-day moving average.

Today's highlight : "We saw early strength after the recent pullback, but once again, it was a rally that struggled to keep its momentum," commented Bell. "With the SPX at critical short-term support near the 1,410 area, bulls would like to see this area hold."

Noteworthy stats at the close:

  • The equity put/call volume ratio across all 10 options exchanges ended at 0.92, with roughly 6.83 million calls and 6.34 million puts traded.
  • The put/call volume ratio on the iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX - 36.48) checked in at 1.01, with puts slightly outstripping calls.
  • The New York Stock Exchange (NYSE) showed an advance/decline ratio of 1.52, as the number of upward movers outpaced the decliners. Likewise, the advance/decline ratio on the Nasdaq stood at 1.41.

More of today's big stories:

And, in case you missed it ... Schaeffer's On Charts : Options Indicator Flashes Potential Buy Signal.

For today's activity in commodities, options, and more, head to page 2.

Crude futures tiptoed higher, snapped out of their five-day slump by a decent report on durable goods orders. However, on the heels of the previous session's bearish inventory report, black gold's positive momentum was muted. December-dated oil ended on a gain of 32 cents, or 0.4%, at $86.05 per barrel.

Gold futures, meanwhile, capitalized on Wednesday afternoon's Fed announcement. With policymakers set to continue their full-throttle easing initiative, traders were drawn to the popular currency hedge. Also upping the precious metal's appeal was a report showing strong bullion demand in India. Gold for December delivery rose $11.40, or 0.7%, to settle at $1,713 per ounce.

Levels to watch in trading...

  • Dow Jones Industrial Average (DJI - 13,103.68) - support at 11,500; resistance at 14,000
  • S&P 500 Index (SPX - 1,412.97) - support at 1,100; resistance at 1,500
  • Nasdaq Composite (COMP - 2,986.12) - 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 critical, timely and insightful report. If you enjoyed today's edition of Market Recap, sign up here for free daily delivery straight to your inbox.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

This article appears in: Investing , Options
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