While futures on the Dow Jones Industrial Average (DJI) have pared an earlier triple-digit loss, they remain bathed in red ink ahead of the bell. Corporate earnings continue to cause concern among investors. Specifically, "Apple (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) both released earnings last night, and in my opinion, it's all about them," said Schaeffer's Equities Analyst Bryan Sapp. "I wrote a blog yesterday about how closely I'll be watching the 200-day moving averages on each stock today, considering both have pulled back to their respective trendlines."
Futures on the Dow Jones Industrial Average are roughly 62 points south of fair value.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 843,478 call contracts traded on Thursday, compared to 639,276 put contracts. The resultant single-session put/call ratio jumped to 0.76, while the 21-day moving average stayed at 0.68.
From the Trading Floor
"The new American Association of Individual Investors (AAII) and National Association of Active Investment Managers (NAAIM) sentiment numbers came out yesterday, and the change from last week was negligible," noted Sapp. "This is a bit concerning, considering the market keeps drifting lower, and it appears investors have either turned into dip buyers or are apathetic toward the selloff from the top. I would really like to see some more skepticism return to the markets."
Currencies and Commodities
Earnings and Economic Data
The week wraps up with the advance report on third-quarter gross domestic product (GDP) and the Thomson Reuters/University of Michigan consumer sentiment index for October. Wall Street will also contemplate earnings reports from Merck & Co. (MRK), Arch Coal (ACI), Comcast (CMCSA), Coventry Health Care (CVH), Legg Mason (LM), Moody's (MCO), and The Goodyear Tire & Rubber Company (GT).
The Case for Big Moves in IWM and QQQ
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