Opening View

Dow Jones Industrial Average Up as Wall Street Awaits Fed Guidance

Why SPY at 180 is a key level to watch this week

by 12/17/2013 8:18:46 AM
Stocks quoted in this article:

"The Dow Jones Industrial Average (INDEXDJX:.DJI) was mostly range-bound on Monday, after a strong morning gap lifted the index," noted Schaeffer's Senior Options Strategist Tony Venosa, CMT. "Today kicks off the final Federal Open Market Committee (FOMC) meeting of the year, with a statement slated for release tomorrow. There has been a lot of chatter recently about a December tapering, so the next two days could be quite volatile." Ahead of the scheduled event, futures are modestly higher, as the DJI looks to notch a third straight daily win. Meanwhile, on today's economic calendar, investors will be digesting the latest consumer price index (CPI) and core CPI, as well as the National Association of Home Builders (NAHB) housing market index.

Plus, our Trading Topic of the Week -- Trading Low-Priced Options: DON'T be tempted by the cheapest option available. It may seem like a good idea to keep your entry costs low by purchasing the lowest-priced option available. However, bear in mind that the cheapest contracts are most likely to expire worthless.

And now, on to the numbers...

Dow Jones Industrial Average, S&P and Nasdaq futures

Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are more than 26 points above breakeven.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 967,608 call contracts traded on Monday, compared to 481,954 put contracts. The resultant single-session put/call ratio plunged to 0.50, while the 21-day moving average stayed at 0.57.

NYSE and Nasdaq summary

Volatility indices

From the Trading Floor

"Keep an eye on the 180 strike for the SPDR S&P 500 ETF Trust (SPY), as enormous call open interest resides here in the December series," continued Venosa. "These contracts expire at Friday's close, and could prove to be a near-term roadblock for the shares."

Currencies and Commodities

  • The U.S dollar index is flirting with a 0.04% lead ahead of the bell, with the currency hovering around 80.11.
  • Elsewhere, crude oil is looking to erase a portion of Monday's gains, with crude for January delivery down 0.3% at $97.52 per barrel.
  • Gold futures are pointed south, as well, with the February-dated contract 0.5% lower at $1,237.70 an ounce.
Currencies and commodities

Earnings and Economic Data

On today's docket are the CPI, core CPI, and the NAHB housing market index. The FOMC also kicks off its final scheduled meeting of the year. Jabil Circuit (JBL) and VeriFone Systems (PAY) will announce quarterly earnings.

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