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Dow Jones Industrial Average Heads South; Jobs Data Takes Center Stage

Why $175 is a key short-term level to watch on the SPY

by 2/5/2014 8:06:58 AM
Stocks quoted in this article:

The Dow Jones Industrial Average (INDEXDJX:.DJI) is on pace to pare a portion of yesterday's gains, with futures pointed lower ahead of the bell. As Schaeffer's Senior Options Strategist Tony Venosa, CMT, noted, "Turnaround Tuesday was nothing more than a minor bounce in the context of a short-term downtrend. This morning, markets will get a sneak preview of this Friday's employment report, with the ADP payroll estimate for January slated for release." The latest ISM non-manufacturing index is also on the day's economic docket. Meanwhile, speeches from a pair of Federal Reserve officials are on tap in the latter half of the session.

Elsewhere, "In the weekly 2/7 series of options -- which expires at Friday's close -- peak put open interest for the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) resides at the 175 strike," continued Venosa. "This could support the shares in the near term. "

Plus, our Trading Topic of the Week -- Reasons to Dodge Directional Risk: Take the pressure off your directional forecasting skills. If the stock looks poised for a big breakout -- but it's hard to tell which way the bull/bear scales are going to tip -- a straddle allows you to hedge your bets.

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 more than 48 points below breakeven.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 1,159,295 call contracts traded on Tuesday, compared to 693,919 put contracts. The resultant single-session put/call ratio dipped to 0.60, while the 21-day moving average rose to 0.57.

NYSE and Nasdaq summary

Volatility indices

Currencies and Commodities

  • The U.S. dollar index is flirting with a 0.1% drop in pre-market trading, with the greenback last seen at 81.07.
  • Ahead of today's weekly inventories update, crude oil has added 0.7%, with the front-month contract lingering near $97.88 per barrel.
  • Elsewhere, gold futures are on the mend, with gold for April delivery up 0.6% at $1,258.30 an ounce.
Currencies and commodities

Earnings and Economic Data

The ADP employment report, ISM non-manufacturing index, and regularly scheduled crude inventories report are on today's economic docket. Merck (MRK), Walt Disney (DIS), Pandora Media (P), TWTR, Akamai Technologies (AKAM), Allergan (AGN), Green Mountain Coffee Roasters (GMCR), Humana (HUM), IAC/InterActiveCorp (IACI), Level 3 Communications (LVLT), Marathon Oil (MRO), Meritage Homes (MTH), NASDAQ OMX Group (NDAQ), O'Reilly Automotive (ORLY), Prudential Financial (PRU), Ralph Lauren (RL), Time Warner (TWX), and Yelp (YELP) will step into the earnings confessional.

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