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Dow Jones Industrial Average Futures Soar as Geopolitical Tensions Ease

Commodities head south as traders seek out riskier investments

by 3/4/2014 8:12:22 AM
Stocks quoted in this article:

It's poised to be another volatile session on the Street, with the Dow Jones Industrial Average (INDEXDJX:.DJI) on pace to erase yesterday's triple-digit loss. With little in the way of economic and earnings data for investors to digest, markets will spend the day reacting to events unfolding overseas. Specifically, Russian President Vladimir Putin overnight said that while he has the right to use force, he noted that there is "no need yet" to increase his country's military presence in Ukraine. Meanwhile, U.S. Secretary of State John Kerry will arrive in Kiev today in an attempt to foster negotiations between the two nations. Against this backdrop, the blue-chip barometer is eyeing a 172-point pop right out of the gate.

Elsewhere, "The key levels I've been mentioning recently remain the same -- 1,820, 1,850, and 1,865 on the S&P 500 Index (SPX) and 1,160/1,190 on the Russell 2000 Index (RUT)," said Schaeffer's Senior Trading Analyst Bryan Sapp. "Markets have been all over the place since geopolitical news from Russia and Ukraine first hit the wires last week, but have yet to break any major support levels. For now, this is positive for bulls."

Plus, our Trading Topic of the Week -- Ways to Win with Aggressive Trades: Don't invest in intrinsic value. If you're expecting a drastic pop or drop in the stock, why not juice your returns even further by capitalizing on the greater leverage of at-the-money options?

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 172 points above breakeven.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 1,021,232 call contracts traded on Monday, compared to 634,616 put contracts. The resultant single-session put/call ratio dropped to 0.62, while the 21-day moving average remained at 0.60.

NYSE and Nasdaq summary

Volatility indices

From the Trading Floor

"Fear remains high, as evidenced by recent action in the CBOE Volatility Index (VIX)," noted Sapp. "Even as stocks bounced significantly off their lows, the bid in volatility-based products remained. This will likely be the case until we get some sort of resolution out of Eastern Europe, which could take some time."

Currencies and Commodities

  • The U.S. dollar index is down 0.1% in pre-market trading, with the currency lingering near 79.99.
  • As concern over the conflict between Ukraine and Russia eases, crude oil is on track to give back a portion of its recent gains. At last check, crude for April delivery was off 1.4% to trade at $103.49 per barrel.
  • Gold futures -- also known for their safe-haven appeal -- are also pointed south ahead of the bell, with the front-month contract 1.3% lower at $1,332.70 an ounce.
Currencies and commodities

Earnings and Economic Data

There are no significant economic reports scheduled for today. AeroVironment (AVAV), AutoZone (AZO), Bob Evans Farms (BOBE), RadioShack (RSH), Smith & Wesson (SWHC), and Trina Solar (TSL) will step up to the earnings plate.

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