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Dow Jones Industrial Average Futures Plunge as Ukraine Mobilizes Troops

Crude oil and gold both jump amid rising geopolitical tensions

by 3/3/2014 8:20:28 AM
Stocks quoted in this article:

The Dow Jones Industrial Average (INDEXDJX:.DJI) is bracing for a triple-digit drop right out of the gate. The risk-off backdrop follows Ukraine's call on Sunday to mobilize its troops after Russian forces seized control of Crimea. Secretary of State John Kerry will head to Kiev on Tuesday to assess the situation. Meanwhile, back on the homefront, traders will have a number of data points to digest, including reports on factory activity, personal income, construction spending, and auto sales.

Elsewhere, as Schaeffer's Senior Trading Analyst Bryan Sapp noted, "Friday's action was very unsettling for many bulls. Both the S&P 500 Index (SPX) and the Russell 2000 Index (RUT) broke to fresh all-time highs in the morning, but that entire move reversed in the afternoon on news out of Ukraine. Going forward, resistance levels to watch are 1,860 on the S&P 500 and 1,190 on the RUT. Potential support, meanwhile, is at 1,820-1,850 for the S&P 500 and 1,160 for the RUT."

Plus, our Trading Topic of the Week -- Ways to Win with Aggressive Trades: Focus on short-term options. Combat the negative effects of time decay -- and decrease your overall risk -- by keeping your time horizon as narrow as possible.

And now, on to the numbers...

Dow Jones Industrial Average, S&P and Nasdaq futures

Futures on the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) are nearly 125 points below breakeven.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 1,422,140 call contracts traded on Friday, compared to 895,915 put contracts. The resultant single-session put/call ratio jumped to 0.63, while the 21-day moving average stayed at 0.60.

NYSE and Nasdaq summary

Volatility indices

From the Trading Floor

"A few signs of excessive optimism toward the markets surfaced on Friday," said Sapp. "The State Street and North American Investor Confidence poll showed the highest North American reading ever seen. Additionally, E*TRADE Financial Corporation (NASDAQ:ETFC) released data that showed its average daily trading revenues over the past year. These revenues made a fresh four-year high this month, and this is a sign that retail investors are entering the stock market again. As a contrarian bull, this is not a welcome sign."

Currencies and Commodities

  • The U.S. dollar index is up 0.3% ahead of the bell to trade at 79.91.
  • Amid increasing tension between Ukraine and Russia, crude oil has shot 2% higher in pre-market trading, with the front-month contract last seen lingering near $104.65 per barrel.
  • Gold futures, meanwhile, have tacked on 1.8%, with gold for April delivery hovering around $1,345.80 an ounce.
Currencies and commodities

Earnings and Economic Data

The purchasing managers manufacturing index (PMI) and the Institute for Supply Management's (ISM) manufacturing index are slated for release today, along with data for personal income and outlays, construction spending, and motor vehicle sales. Companies reporting earnings include Dendreon (DNDN), MBIA (MBI), SolarCity (SCTY), and Stratasys (SSYS).

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