The Dow Jones Industrial Average (INDEXDJX:.DJI) is set to extend Thursday's triple-digit decline, with futures pointed solidly lower ahead of the bell. "Markets across the globe sold off yesterday, spooked by a report that showed manufacturing in China contracted," said Schaeffer's Senior Options Strategist Tony Venosa, CMT. "Selling in domestic equities was widespread, as money moved into bonds and gold. This morning, there are no economic reports set for release, so investors will most likely be focused on earnings." Additionally, a sell-off in emerging market currencies ahead of next week's Federal Open Market Committee (FOMC) policy-setting meeting is also weighing on investor sentiment. In December, the U.S. central bank voted to pare its asset-buying program by $10 billion per month.
Futures on the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) are more than 73 points below breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,346,004 call contracts traded on Thursday, compared to 879,643 put contracts. The resultant single-session put/call ratio jumped to 0.65, while the 21-day moving average rose to 0.54.
From the Trading Floor
"If we see more selling today, keep an eye on the $180 level for the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), as there are heavy put accumulations at the corresponding strike in both the February and March series of options," noted Venosa.
Currencies and Commodities
Earnings and Economic Data
Today's docket is clear of economic reports. Procter & Gamble (PG), Bristol-Myers Squibb (BMY), Covidien (COV), Honeywell (HON), Kimberly-Clark (KMB), Stanley Black & Decker (SWK), and Xerox (XRX) are among the companies releasing earnings on Friday.
The Case for Big Moves in IWM and QQQ
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