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Choppy Trading Session Resolves to the Upside
By: Schaeffer's Investment Research
"The S&P 500 Index experienced an inside day today," noted
Schaeffer's Senior Options Strategist Tony Venosa, CMT, pointing
out that the index's total daily trading range (1,552.52 to
1,562.60) was contained within yesterday's intraday range. "Market
participants were clearly awaiting tomorrow's employment report for
March," he added. Meanwhile, despite rising concerns out of North
Korea and words of caution from the European Central Bank, the
Dow Jones Industrial Average (DJI)
finished higher after a few midday blips into negative territory.
Continue reading for more on today's market, including :
- Why our Senior Trading Analyst Bryan Sapp says to "look for an upside move tomorrow."
- How options traders bet on these two banking giants ahead of next week's earnings announcements.
- Cisco Systems ( CSCO ) caught the attention of long-term bearish speculators.
- Markets finish higher in choppy trading, the Bank of Japan makes a grand gesture, and Sirius XM Radio ( SIRI ) traders expect a sharp drop.
The Dow Jones Industrial Average (DJI) beat the odds to close with a gain of 56 points, or 0.4%, at 14,606.11, following an intraday test of its 10-day moving average. Of the Dow's 30 components, 25 closed in positive territory, led by Hewlett-Packard ( HPQ ), which tacked on 1.8% following a pair of analysts' upgrades this morning. International Business Machines ( IBM ) and Alcoa ( AA ) paced the five decliners, giving back 0.6% each.
The S&P 500 Index (SPX) had a winning day as well, adding 6.3 points, or 0.4%, to 1,559.98, a hair above its own 10-day moving average. Finally, after spending much of the day in negative territory, the Nasdaq Composite (COMP) managed to settle higher, up 6.4 points, or 0.2%, closing at 3,224.98.
It was an odd day for the CBOE Market Volatility Index (VIX), which spiked to an intraday high of 14.79 -- up 4.1% from Wednesday's close -- before closing off 0.3 point, down 2.3% at 13.89.
A Trader's Take :
"The decision by the Bank of Japan to launch its own massive quantitative easing program helped buoy our markets," Venosa observed. "Also, the basic materials sector -- which has been beaten down the most this year -- helped lead the markets higher today."
3 Things to Know About Today's Market :
- Weekly jobless claims were a disappointment, rising by 28,000 to a seasonally adjusted four-month high of 385,000. Economists had expected the reading to decline. (Reuters)
- In an aggressive effort to achieve its 2% inflation target within the next two years, the Bank of Japan pledged to double its monetary stimulus to roughly $1.4 trillion by the end of 2014. The central bank plans to buy both long-term debt as well as less traditional securities such as ETFs . (CNNMoney)
- Facebook Inc (FB) did not, as many had assumed, announce its own smartphone today, but instead unveiled an interface Android phone users can download free of charge as early as next week. Facebook Home will allow users to "see [their] world through people, not apps," according to Facebook CEO Mark Zuckerberg. (Los Angeles Times)
5 Stocks We Were Watching Today :
- Sirius XM Radio ( SIRI ) bears bet on a sharp decline over the longer term.
- Citigroup (C) optimists expect a bounce higher by the end of Friday's trading.
- Netflix (NFLX) call buyers took a very short-term view .
- Applied Materials (AMAT) saw a shift in direction among short-term option traders.
- First Solar (FSLR) option pits were crowded with put buyers and put sellers .
For a look at today's options movers and commodities activity, head to page 2.
A four-month high in U.S. jobless claims, together with dreary remarks from European Central Bank (ECB) leader Mario Draghi, combined forces to pressure oil into the red. By the close, May-dated oil futures were off $1.19, or 1.3%, at $93.26 per barrel.
Gold also shifted lower on the day, though the precious metal did bounce back from its intraday low. June gold futures settled with a loss of $1.10, or 0.1%, at $1,552.40 per ounce.
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.