Real-Time Market Insights
Hot Stock News for Options Traders

Dow Jones Industrial Average Drops Ahead of Fed

Asian markets rise in the wake of Turkey's rate hike

by 1/29/2014 8:28:30 AM
Stocks quoted in this article:

After an earlier pop on the heels of Turkey's interest-rate hike, futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) were last seen sitting below breakeven. In morning trading, investors will be chewing over earnings reports from the likes of AT&T Inc. (NYSE:T), The Boeing Company (NYSE:BA), and The Dow Chemical Company (NYSE:DOW), among others. However, today's market-moving event is the afternoon release of the Federal Open Market Committee's (FOMC) latest policy decision. Economists are expecting the Federal Reserve to reduce its monthly asset-purchase program by $10 billion to $65 billion.

Meanwhile, "Monday's low of 1,772 on the S&P 500 Index (SPX) -- which came amid aggressive selling -- held on Tuesday, so I'd watch the 1,770-1,780 range for a cue as to the next bigger move," commented Schaeffer's Senior Trading Analyst Bryan Sapp. "A break on either side of this range would likely be the signal."

Plus, our Trading Topic of the Week -- 5 Tips for Short-Term Trading: Make sure there aren't major volatility expectations priced in already. By learning about one simple tool, you can avoid overpaying for volatility, and keep your risk/reward profile out of "daredevil" territory.

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 roughly 44 points below breakeven.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 1,225,915 call contracts traded on Tuesday -- the fewest since Jan. 3 -- compared to 648,952 put contracts. The resultant single-session put/call ratio arrived at 0.53, while the 21-day moving average remained at 0.54.

NYSE and Nasdaq summary

Volatility indices

From the Trading Floor

"All eyes will be on the Fed today, and I'm mostly concerned with the reaction, or lack thereof, to the news," continued Sapp. "Many market participants are expecting an announcement that a tapering of asset purchases will continue, and it could be reasonably inferred that this will cause the market to go lower. If there is a reaction opposite to what is 'expected,' given the news, then that would be a sign that sentiment has drifted too far in one direction, and a contrarian position should be taken."

Currencies and Commodities

  • The U.S dollar index is flirting with a 0.1% lead ahead of the bell, with the currency last seen at 80.64.
  • Ahead of today's weekly inventories update, crude oil has shed 0.09%, with the front-month contract lingering near $97.32 per barrel.
  • Elsewhere, gold futures are looking to pare a portion of Tuesday's losses, with the malleable metal 0.8% higher at $1,260.60 an ounce.
Currencies and commodities

Earnings and Economic Data

On Wednesday, weekly crude inventories are due out, and the FOMC will announce its latest policy decision at 2 p.m. ET. Scheduled to post earnings are BA, Facebook (FB), Biogen Idec (BIIB), Citrix Systems (CTXS), DOW, EMC (EMC), Energizer (ENR), JetBlue Airways (JBLU), Las Vegas Sands (LVS), Marathon Petroleum (MPC), QUALCOMM (QCOM), Southern Company (SO), Tractor Supply (TSCO), and Valero Energy (VLO).

Page 1Page 2

Partner Center

© 2015 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email:

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by | Data delayed 15-20 minutes unless otherwise indicated.