The Dow Jones Industrial Average (INDEXDJX:.DJI) is positioned to resume its upward momentum, with futures pointed higher in pre-market trading. Investors will have plenty to digest ahead of a long weekend, including updates on housing starts and building permits, factory output, and consumer sentiment. On the corporate front, earnings results from blue chips General Electric Company (NYSE:GE) and Intel Corporation (NASDAQ:INTC) should garner their fair share of attention.
Meanwhile, "I'm still watching the same levels on the S&P 500 Index (SPX) I've mentioned throughout the week -- specifically, 1,850 as resistance, and 1,810 as support," commented Schaeffer's Senior Trading Analyst Bryan Sapp. "Another interesting level is $105 on the iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSEARCA:TLT), which appears to have hit a speed bump here. Today is January options expiration, and the 105 strike is home to peak call open interest. This may be having a dampening effect on the ETF, and could potentially lead to a pop early next week, once the options expire."
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are roughly 18 points above breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,576,034 call contracts traded on Thursday, compared to 890,926 put contracts. The resultant single-session put/call ratio jumped to 0.57, while the 21-day moving average stayed at 0.52.
From the Trading Floor
"One of the market metrics that we follow closely to monitor sentiment is the equity-only buy-to-open put/call volume ratio," said Sapp. "When it is high, it can indicate extreme pessimism, and vice versa when it's low. The 21-day moving average of this metric actually hit a fresh three-year low yesterday. This could be a sign of excessive optimism, and a lack of people 'needing' to hedge their long stock positions."
Currencies and Commodities
Earnings and Economic Data
Closing out the week's lineup of economic reports are housing starts and building permits, industrial production and capacity utilization, and the preliminary reading of the Thomson Reuters/University of Michigan consumer sentiment index for January. GE, Bank of New York Mellon (BK), Morgan Stanley (MS), and SunTrust Banks (STI) are on the day's earnings docket.
The Case for Big Moves in IWM and QQQ
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