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Relief Rally Short-Lived as Stocks and Commodities Drop Again

By: Schaeffer's Investment Research
Posted: 4/17/2013 4:22:00 PM
Referenced Stocks: AAPL;AMD;C;JNJ;S

"Although there were some whispers about potential downgrades over in Europe, today was largely driven by earnings," summarized Schaeffer's Senior Equity Analyst Joe Bell. After bouncing back on Tuesday, the Dow Jones Industrial Average (DJI) was firmly controlled by the bears again today, as it again violated increasingly tenuous support at its 10-day moving average. Volatility swelled, as represented by the CBOE Market Volatility Index (VIX) , which jumped more than 28% intraday to its highest level since its late-February spike.

Continue reading for more on today's market, including :

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The Dow Jones Industrial Average (DJI) managed to close off its lows of the day but still suffered a 138-point decline, falling 0.9% to 14,618.59. Four of the Dow's 30 members ended in positive territory, with Johnson & Johnson ( JNJ ) leading the pack, up 0.6%. Bank of America (BAC) paced the 26 decliners, off 4.7% on the heels of its quarterly earnings report.

The S&P 500 Index (SPX) gave back 23 points, or 1.4%, but managed to stay above psychologically strong support at 1,550, closing the session at 1,552.01. In intraday action, however, the index dipped to the 1,543.69 mark. Elsewhere, the Nasdaq Composite (COMP) plunged 1.8%, or 60 points, to 3,204.67.

The CBOE Market Volatility Index (VIX) bounced back today, regaining much of what was lost in Tuesday's session. Although it surged to 17.90 in late-morning action, the VIX closed up 2.6 points, or 18%, at 16.51.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"The S&P 500 managed to close above its April lows and finds itself right near the bottom of its weekly range," noted Bell. "In spite of the plethora of poorly received news today, a hold above this level is promising."

3 Things to Know About Today's Market :

5 Stocks We Were Watching Today :

  1. Bearish speculators have been stocking up on Research In Motion (BBRY) puts of late.
  2. As Apple Inc. ( AAPL ) tumbled, option players loaded up on short-term puts .
  3. A quick look at the sentiment backdrop in Advanced Micro Devices ( AMD ) ahead of tomorrow's earnings report.
  4. RBC lowered its price target for Nokia Corporation (ADR) (NOK) by 10% ahead of the open.
  5. Netflix Inc. (NFLX) was targeted by short-term call buyers , who may be trying to catch a falling knife.

EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

STOCKS - NOTABLE CALL ACTIVITY

STOCKS - NOTABLE PUT ACTIVITY

Commodities :

Crude futures headed south again today, after the Energy Information Administration (EIA) said gasoline demand was unexpectedly weak during the week ended April 12. By the close, May-dated oil had shed $2.04, or 2.3%, to close at a new year-to-date low of $86.68 per barrel.

Gold futures also backpedaled, thanks in part to a stronger U.S. dollar. June gold futures lost $4.70 on the day, or 0.3%, to settle at $1,382.70 per ounce.

SCHAEFFER'S MARKET POSTURE

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