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Dow Drops Again in Quiet Session While VIX Continues Its Descent
1/8/2013 4:15:00 PM
By: Schaeffer's Investment Research
Dow Jones Industrial Average (DJI)
moved lower again today as investors readied their portfolios for
earnings season. "It was more of the same as yesterday," observed
Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "We
pulled back on light volume as everyone gets ready for earnings
season. Don't worry," Detrick noted, "once earnings season heats
up, we'll start to see more action."
It was indeed a near-repeat of Monday, as the Dow Jones Industrial Average (DJI) traded in a fairly narrow range but spent the entire day south of breakeven. By the close, the blue-chip index had given back 55 points, or 0.4%, but remained above its 10-day moving average for the fifth consecutive session. Still, 14 of the 30 Dow names closed in the black, led by Hewlett-Packard ( HPQ ), which appreciated by 1.5%. Alcoa ( AA ) was flat on the day ahead of its earnings release, and Boeing ( BA ) brought up the rear, losing 2.6% amid reports of a fuel leak with one of its 787 Dreamliner aircraft.
The S&P 500 Index (SPX) moved lower as well, dropping 4.7 points, or 0.3%. The Nasdaq Composite (COMP) suffered the smallest deficit, shedding 7 points, or 0.2%.
After spending most of the day in positive territory, the CBOE Market Volatility Index (VIX) made it six losses in a row, closing down 0.2 point, or 1.2%.
A Trader's Take :
"After the huge rally last week, it could very well have been time for a break, and that is what we're seeing this week," quipped Detrick. "The biggest news of the day were the rumors that AIG was considering suing the U.S. government over violation of the Fifth Amendment. That's right, suing the same government that bailed them out. This isn't set in stone and is not certain to actually happen, but the fact it is even being considered is pretty amazing."
3 Things to Know About Today's Market :
Plus ... Google (GOOG) is testing its free WiFi service in an area populated by those who are probably already paying a monthly Internet fee -- Manhattan's chic Chelsea neighborhood. This is one step toward Mayor Michael Bloomberg's quest to be "the world's leading digital city," with "universal access to high-speed Internet." Under the terms of the deal, GOOG will absorb two-thirds of the costs to build and maintain the network, while a nonprofit neighborhood development group will pick up the rest. While Chelsea isn't exactly a region where residents can't easily afford Internet access, it is home to Google's NYC-based office.
Today's Top Tweet :
"Don't trade out of boredom, have a plan and see it first. Days
like today are often best spent studying."
5 Stocks We Were Watching Today :
Question of the Day :
: How can I determine if I will be assigned on my sold option?
For a look at today's options movers and commodities activity, head to page 2.
Oil futures were little changed in Tuesday's session, with the February contract edging down 4 cents to $93.15 per barrel. Gold futures, however, mounted a strong advance, snapping their recent losing streak. February-dated gold added $15.90, or 1%, to settle at $1,662.20 an 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.