The Dow Jones Industrial Average (INDEXDJX:DJI) is poised to extend Thursday's sharp decline, with futures pointed lower ahead of the bell. "Key support was taken out yesterday pretty much across the board, and the bears appear to be in control of the market at this time," commented Schaeffer's Senior Trading Analyst Bryan Sapp. "The former support level of 1,840 on the S&P 500 Index (SPX) is now resistance, and the next level to watch for a potential bounce is 1,800."
In today's session, the blue-chip barometer is being pressured by JPMorgan Chase & Co. (NYSE:JPM), after the financial firm reported first-quarter earnings results that missed analysts' estimates. The stock is down more than 3% in pre-market trading. Sector peer Wells Fargo & Co (NYSE:WFC) will also unveil its quarterly report this morning, and ahead of the results, the equity is modestly lower.
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are more than 66 points below breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,030,621 call contracts traded on Thursday, compared to 720,460 put contracts. The resultant single-session put/call ratio surged to 0.70 -- its highest perch since March 12 -- while the 21-day moving average remained at 0.58.
From the Trading Floor
"The two sentiment polls that came out on Thursday -- the American Association of Individual Investors (AAII) and the National Association of Active Investment Managers (NAAIM) -- continue to show decreased bullishness among market participants," noted Sapp. "One would have to think that after a horrific day like yesterday, these levels would continue to deteriorate. While the bears remain in control, the current sentiment backdrop will provide a nice risk/reward trade from the long side at some point in the near future. However, the dust will definitely need to settle before the bulls can retake the market."
Currencies and Commodities
Earnings and Economic Data
The producer price index (PPI) and the core PPI, plus the Thomson Reuters/University of Michigan's preliminary consumer sentiment report for April, will hit the Street today. Closing out the week are earnings reports from JPM, WFC, and Fastenal (FAST).
The Case for Big Moves in IWM and QQQ
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