"Both equity and bond markets responded negatively to the latest Federal Open Market Committee (FOMC) policy statement released yesterday afternoon, and the Dow Jones Industrial Average (INDEXDJX:.DJI) fell 114 points," summarized Schaeffer's Senior Options Strategist Tony Venosa, CMT. "The statement and subsequent press conference with Fed Chair Janet Yellen seemed to express a hawkish stance, suggesting rate hikes could begin in early 2015." The DJI is poised to continue its retreat in today's session, with futures pointed lower ahead of the bell. With traders keeping a close eye on the state of the economy, today's updates on employment, manufacturing, and existing home sales should garner a fair amount of attention.
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are more than 42 points below breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,128,832 call contracts traded on Wednesday, compared to 596,821 put contracts. The resultant single-session put/call ratio fell to 0.53, while the 21-day moving average stayed at 0.59.
From the Trading Floor
"Housing shares got a boost from KB Home's (NYSE:KBH) latest earnings release yesterday, but succumbed to late-day selling pressure as a result of rising bond yields," said Venosa. "Meanwhile, continue to watch the $189 level to the upside on the SPDR S&P 500 ETF Trust (SPY), where peak call open interest in the March series resides. On the downside, keep an eye on the 185 strike price, as a large amount of put open interest is located here. I expect one of these strikes to get hit in the next two days."
Currencies and Commodities
Earnings and Economic Data
Weekly jobless claims, the Philadelphia Fed's manufacturing survey, and existing home sales will be released today. Nike (NKE), ConAgra Foods (CAG), Lennar (LEN), Silver Wheaton (SLW), Tibco Software (TIBX), and Wet Seal (WTSL) will step into the earnings confessional.
The Case for Big Moves in IWM and QQQ
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