Real-Time Market Insights
Hot Stock News for Options Traders

Dow Brings Losing Streak to Five, Drops 2.4% for the Week

Gold gains 3% for the week, reaches six-month high

by 3/14/2014 4:19:23 PM
Stocks quoted in this article:

"The highly discussed referendum vote in Crimea is this weekend, and whenever there is uncertainty, most market participants would rather take some risk off the table," reported Schaeffer's Senior Equity Analyst Joe Bell, CMT. "This is exactly what we've experienced during the past week. The S&P 500 Index (SPX) is now trading near former resistance from January, and we are seeing some buyers emerge at this area. The bulls will definitely want to see this area hold as support." Meanwhile, the Dow Jones Industrial Average (DJI) declined for a fifth consecutive session, despite a few attempts to peek into positive territory. For the week, the blue-chip index surrendered 2.4%.

Continue reading for more on today's market, including:

  • Could J.C. Penney Company, Inc. (NYSE:JCP) fall as far as $2 per share? Some aggressive put buyers are willing to bet on it.
  • A change in plans for Sirius XM Holdings Inc. (NASDAQ:SIRI) led to massive call-buying activity, as traders spent more than $2 million on two large blocks.
  • Plug Power Inc (NASDAQ:PLUG) has been on the wildest of rides, and Schaeffer's contributor Adam Warner has all the details.
  • Plus ... World leaders prepare for the Crimea vote, consumer sentiment slips, and General Motors Company (NYSE:GM) suffers a price-target cut.
Trading Topic of the Week -- How to Interpret Short Interest: Look at option activity. Speculative action can offer an interesting context for short interest, adding a further dimension to your overall sentiment analysis.

The Dow Jones Industrial Average (DJI - 16,065.67) took its fifth consecutive tumble, losing 43.2 points, or 0.3%, and bringing its weekly deficit to 2.4%. The Boeing Company (NYSE:BA) paced the Dow's 10 advancers with a gain of 1%; UnitedHealth Group Inc. (NYSE:UNH) brought up the rear, falling 1.7%.

The S&P 500 Index (SPX - 1,841.13) traded in positive territory for much of the first half of the session, but closed with a loss of 5.2 points, or 0.3%. The Nasdaq Composite (COMP - 4,245.40) also fell, shedding 15 points, or 0.4%. For the week, the SPX dropped nearly 2%, while the COMP gave back 2.1%.

The CBOE Volatility Index (VIX - 17.82) continued to sprint higher, finishing up 9.9%, or 1.6 points, at its highest close since Feb. 5. This week, the VIX spiked 26.3%.

CLOSING SUMMARY  INDICES

CLOSING SUMMARY  NYSE AND NASDAQ

A Trader's Take:

"It's interesting just how high option premiums are lately," noted Bell. "They are more than double historical volatility over the past 20 days, and it's clear there is a lot of nervousness out there surrounding the Ukraine situation. It's also notable that retail sales and jobs figures have actually shown signs of improvement compared to the disappointing winter months, but this news is getting pushed aside for the time being."

5 Items on Our Radar Today:

  1. Attentions were focused overseas once again, ahead of Sunday's vote where Crimean residents will decide whether to secede from Ukraine to join Russia. U.S. Secretary of State John Kerry met in London with Russian Foreign Minister Sergey Lavrov, while U.S. and European Union leaders drew up potential sanctions for Russian leaders and businesses. These penalties could be implemented as soon as Monday, should Crimea opt to secede. (AP, via Yahoo! News)
  2. Consumer sentiment retreated during the first half of March, according to the latest consumer sentiment index from Thomson Reuters/University of Michigan. The reading dropped to 79.9 from 81.6 at the end of February, compared to expectations for an increase. (FOX Business)
  3. Producer prices edged 0.1% lower in February, the first month-over-month decline since November. On a year-over-year basis, the producer price index (PPI) rose 0.9%. The core PPI -- which excludes food and energy -- advanced a scant 0.1%. (AP, via ABC News)
  4. Continued drama over its recall methods spurred a price-target reduction on General Motors Company (NYSE:GM) this morning.
  5. Why continued skepticism could mean more upside for Pandora Media Inc (NYSE:P), per our Option Idea of the Week.
EARNINGS

For a look at today's options movers and commodities activity, head to page 2.

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