The Dow Jones Industrial Average (INDEXDJX:.DJI) is ready to continue its recent descent, with futures pointed lower ahead of the bell. Investors are awaiting the latest retail sales data and weekly jobless claims, both slated for release at 8:30 a.m. ET. Additionally, Wall Street will be keeping a close eye on Washington, as members of Congress debate the budget deal. Amid these economic developments, fears that the Federal Reserve will announce a tightening of the purse strings at next week's policy-setting meeting have moved front and center.
Meanwhile, "The S&P 500 Index (SPX) broke the 1,800 level we've been watching, making the next area of support between 1,770 and 1,780," explained Schaeffer's Senior Trading Analyst Bryan Sapp. "Elsewhere, the Russell 2000 Index (RUT) continues to lead the weakness, and is sitting right above the 1,100 mark, which is near its 50-day moving average. I'd be very cautious with stocks, should a significant break to the downside occur."
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are more than 23 points below breakeven.
The Chicago Board Options Exchange (CBOE) saw 988,384 call contracts traded on Wednesday, compared to 609,726 put contracts. The resultant single-session put/call ratio jumped to 0.62, while the 21-day moving average remained at 0.57.
From the Trading Floor
"Bullish sentiment continues to grow, despite the very weak price action we've seen this week," noted Sapp. "The Investors Intelligence poll that was released yesterday actually showed the highest percentage of bulls since December 2010, and the lowest number of bears since March 1987. This is worrisome to me, as this extreme sentiment is being met with negative price action."
Currencies and Commodities
Earnings and Economic Data
Weekly jobless claims, retail sales figures, import and export prices, and business inventories are listed on today's lineup. Telling all in the earnings confessional are Adobe Systems (ADBE), Ciena (CIEN), Lululemon Athletica (LULU), and Quiksilver (ZQK).
Recent XIV Action May Bode Well for Bulls
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