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US Markets Dismiss Overseas Peer Pressure to Move Sharply Higher

Posted
6/13/2013 4:20:00 PM
By: Schaeffer's Investment Research
Referenced Stocks:BBRY;CAT;INTC;MSFT;MU

"What a day. Everyone was freaking out last night when Japan was down significantly at the open," recalled Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "This morning, the Nikkei eventually closed down 6.4%, and U.S. futures were much lower. Then a funny thing happened ... we got some decent economic data in the form of May retail sales and weekly jobless claims, and an oversold bounce was born." The Dow Jones Industrial Average (DJI) snapped its three-day losing streak to power nearly 200 points higher, retaking short-term trendline support. "The big question is," Detrick added, "can this bounce last?"

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

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The topsy-turvy movement in the Dow Jones Industrial Average (DJI) continued, as the blue-chip index gained 180.9 points, or 1.2%, to settle at 15,176.08. With this advance, the Dow retook control of the 15,000 mark, as well as its 10-day and 40-day moving averages. Of the Dow's 30 components, 28 finished north of breakeven, with Caterpillar ( CAT ), Merck (MRK), and Pfizer (PFE) each gaining 2.3%. The two underperformers were Microsoft ( MSFT ) and DuPont (DD), respectively off 0.8% and 0.7%.

Also bounding higher was the S&P 500 Index (SPX) , which added 23.8 points, or 1.5%, to end the session at 1,636.36. The index finished near its highs of the day, and back above its 10-day trendline. The SPX has closed north of its 10-day just four times since May 22. The Nasdaq Composite (COMP) also edged back above its 10-day moving average, settling with a gain of 44.9 points, or 1.3%, at 3,445.36.

The CBOE Market Volatility Index (VIX) plunged as the bulls returned to the fray, dropping 11.7%, or 2.2 points, to close at 16.41. Still, the VIX remains 8.4% higher for the week.

CLOSING SUMMARY - INDICES

CLOSING SUMMARY - NYSE AND NASDAQ

A Trader's Take :

"What is encouraging is the S&P 500 once again found support from its 50-day moving average," continued Detrick. "Now, we've seen bounces like this a lot the past few weeks and just as quickly, they are sold. News is light and tomorrow is a Friday in the summer, so a light-volume day is likely. Still, volatility has really ramped up, so I wouldn't expect a boring day."

3 Things to Know About Today's Market :

5 Stocks We Were Watching Today :

  1. Short-term straddle sellers wagered on limited volatility in Advanced Micro Devices (AMD) .
  2. Long-term call buying was popular in the Alcatel Lucent SA (ALU) option pits today.
  3. A neutral short strangle was executed on Micron Technology ( MU ) , after the shares earned multiple price-target hikes.
  4. Barnes & Noble (BKS) call buyers swooped in looking for bargains, as the stock took a plunge.
  5. Following news that it was unloading its Canadian operations, Safeway Inc. (SWY) was downgraded at Citigroup.

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 :

Oil futures advanced in today's trading, responding favorably to upbeat retail sales and jobless claims news. Crude for July delivery traded up 81 cents, or 0.8%, to close at $96.69 a barrel.

Conversely, the combination of better-than-expected U.S. data and sharp losses in Japan sent gold futures into the red today. By the close, August-dated gold had dropped $14.20, or 1%, to settle at $1,377.80 an ounce.

SCHAEFFER'S MARKET POSTURE