The Dow Jones Industrial Average (INDEXDJX:.DJI) is on pace to erase Tuesday's modest loss, with futures in the green ahead of the bell. In today's session, homebuilders will be in focus, with new home sales data due out at 10 a.m. ET. Additionally, retailers should garner their fair share of attention, as investors digest this morning's quarterly earnings announcements from Abercrombie & Fitch Co. (NYSE:ANF) and Target Corporation (NYSE:TGT). Meanwhile, long-term laggard J.C. Penney Company, Inc. (NYSE:JCP) will report after tonight's closing bell.
"I'm still watching the 1,850 area on the S&P 500 Index (SPX) and 1,180 on the Russell 2000 Index (RUT), both of which represent round numbers near all-time highs," noted Schaeffer's Senior Trading Analyst Bryan Sapp. "The S&P 500 took this level out on Monday, but couldn't hold it on a closing basis. The longer the two indexes trade around these key levels, the more 'energy' the market will build. This could result in an outsized move in either direction once we get a definitive break." Both the S&P 500 and the RUT are pointed higher in pre-market trading.
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are more than 54 points above breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,291,604 call contracts traded on Tuesday, compared to 730,752 put contracts. The resultant single-session put/call ratio rose to 0.57, while the 21-day moving average remained at 0.60.
From the Trading Floor
"Anecdotally, action in some individual stocks is very interesting to me," said Sapp. "The names that are performing the best are those that are very highly shorted and have negative sentiment surrounding them. Some of these include TSLA, SolarCity Corp (NASDAQ:SCTY), BlackBerry Ltd (NASDAQ:BBRY), and GameStop Corp. (NYSE:GME). This could be a sign that bears are finally capitulating on select names with questionable fundamentals."
Currencies and Commodities
Earnings and Economic Data
New home sales and weekly crude inventories are scheduled for release today. Meanwhile, earnings from Baidu.com (BIDU), JCP, Chesapeake Energy (CHK), ANF, Autodesk (ADSK), Barnes & Noble (BKS), Dollar Tree (DLTR), L Brands (LB), Lowe's (LOW), SodaStream (SODA), TGT, TASER International (TASR), TiVo (TIVO), Transocean (RIG), and Workday (WDAY) are due out.
The Case for Big Moves in IWM and QQQ
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