The Dow Jones Industrial Average (DJI) is pointed to a higher start, with encouraging manufacturing data out of China stoking the bullish flames. However, investors are keeping a wary eye trained on the ongoing fiscal-cliff discussions, with U.S. legislators having yet to reach a resolution on the looming economic disaster.
Meanwhile, "I've been paying a lot of attention to intermarket indicators lately," said Schaeffer's Senior Trading Analyst Bryan Sapp. "The bond selloff over the past few days leads me to believe this pullback in equities will remain contained. However, it will be worrisome if we see any spike in bonds and/or the CBOE Volatility Index (VIX) today."
Futures on the Dow Jones Industrial Average are 31 points above fair value.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 824,832 call contracts traded on Thursday, compared to 503,724 put contracts. The resultant single-session put/call ratio remained at 0.61, while the 21-day moving average fell to 0.64.
From the Trading Floor
"The Nasdaq Composite (COMP) broke back below the 3,000 mark yesterday, so that could be resistance once again," continued Sapp. "Meanwhile, the S&P 500 Index (SPX) broke support from 1,425, which could now act as an overhead ceiling. To the downside, 1,385 and 1,400 should serve as support."
Currencies and Commodities
Earnings and Economic Data
The week concludes with the consumer price index (CPI), industrial production, and capacity utilization. There are no notable earnings results due for release.
Mid-Caps Nearing a Triple of March 2009 Lows
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