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Dow Jones Industrial Average Higher Ahead of Fed Speeches, FOMC Minutes

Crude oil moves north ahead of today's weekly inventories update

by 5/21/2014 8:17:07 AM
Stocks quoted in this article:

The Dow Jones Industrial Average (INDEXDJX:DJI) is signaling a bounce this morning, after hawkish comments by Philadelphia Fed President Charles Plosser yesterday prompted a triple-digit sell-off in the blue-chip barometer. The central bank will remain center stage, with speeches from a number of Federal Reserve officials on tap -- including a late-morning commencement address from Fed Chief Janet Yellen. Additionally, minutes from the latest Federal Open Market Committee (FOMC) meeting are due at 2 p.m. ET.

Elsewhere, "The S&P 500 Index (SPX) once again tested its 50-day moving average on Tuesday, and the trendline held as support," said Schaeffer's Senior Trading Analyst Bryan Sapp. "This will remain very key for bulls going forward. Overhead, resistance at 1,900 looms. While the sharp sell-off in small-caps yesterday is a bit troublesome, the relative strength in the Nasdaq 100 Index (NDX) is a positive for bulls. It continues to loom around the 3,600 level, which has acted as resistance for nearly two months. A break above there could give rise to a rally across all major market indexes."

Plus, our Trading Topic of the Week -- How to Get Started with Options: Stick with basic strategies. Make sure you master the fundamentals before spreading your wings with iron condors and long butterflies.

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 nearly 36 points above breakeven.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 893,701 call contracts traded on Tuesday -- the fewest since May 5 -- compared to 589,710 put contracts. The resultant single-session put/call ratio rose to 0.66, while the 21-day moving average stayed at 0.64.

NYSE and Nasdaq summary

Volatility indices

From the Trading Floor

"Charles Plosser -- a voting member of the FOMC -- spoke yesterday, and declared the Federal Reserve could potentially raise interest rates ahead of schedule," noted Sapp. "At the time of his speech, the markets sold off sharply, likely a result of his comments. The knee-jerk reaction to a Fed hawk's speech is further evidence of the fear that exists in the market right now. Although the CBOE Volatility Index (VIX) remains very low, bears continue to look for reasons to sell rallies."

Currencies and Commodities

  • The U.S. dollar index is lingering just above breakeven this morning, with the greenback last seen at 80.07.
  • Ahead of today's weekly inventories update, crude oil is 0.7% higher to trade at $103.09 per barrel.
  • Elsewhere, gold futures are signaling a slow start, with the commodity down 0.3% ahead of the bell at $1,290.30 an ounce.
Currencies and commodities

Earnings and Economic Data

The regularly scheduled crude inventories report will be released today, along with the minutes from the latest FOMC meeting. Meanwhile, Fed Chair Janet Yellen will deliver the New York University commencement address at Yankee Stadium. Companies stepping under the earnings spotlight include American Eagle (AEO), HPQ, Hormel Foods (HRL), L Brands (LB), Lowe's (LOW), NetApp (NTAP), PetSmart (PETM), Renren (RENN), SINA Corp (SINA), Target (TGT), Tiffany & Co. (TIF), Trina Solar (TSL), and Williams-Sonoma (WSM).

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