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Dow Jones Industrial Average Signals a Bounce; Geopolitical Tensions Rise

Japan's Nikkei falls to a six-month low amid a strengthening yen

by 4/14/2014 8:20:06 AM
Stocks quoted in this article:

The Dow Jones Industrial Average (INDEXDJX:DJI) is signaling a modest bounce this morning, after the blue-chip barometer surrendered 2.4% in last week's trading. On the homefront, the latest retail sales numbers and earnings results from financial firm Citigroup Inc (NYSE:C) will be in focus. However, traders will also be keeping one eye trained overseas, after pro-Russian separatists over the weekend seized control of the Ukranian city of Slaviansk. In response, acting Ukraine president Oleksander Turchinov issued a deadline for the rebels to leave the area, which has since expired.

Back to the charts, "There are some very key support levels near current market prices," said Schaeffer's Senior Trading Analyst Bryan Sapp. "Bulls will definitely want to see these hold, as a break could signify a change in the overall trend. These noteworthy areas are 1,800 on the S&P 500 Index (SPX), 4,000 on the Nasdaq Composite (COMP), and 1,100 on the Russell 2000 Index (RUT) -- which coincides with the RUT's 200-day moving average. This trendline hasn't been tested since late 2012."

Plus, our Trading Topic of the Week -- Tips for Short-Term Trading: Target stocks poised for a big move. To reap big returns with a short-term trade, you need to single out stocks that make dramatic moves on a regular basis. Historical volatility and Bollinger Bands can offer important clues.

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 about 35 points above breakeven.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 1,085,976 call contracts traded on Friday, compared to 814,735 put contracts. The resultant single-session put/call ratio rose to 0.75, while the 21-day moving average edged higher to 0.58.

NYSE and Nasdaq summary

Volatility indices

From the Trading Floor

"The CBOE Volatility Index (VIX) is finally starting to show some fear in the market," continued Sapp. "It peaked on Friday near 18, which is around the former highs from mid-March. It seems that we're very close to a 'boom or bust' area in markets, as many indexes are hovering around major support -- and fear has seen a significant uptick. Going forward, I would expect the next market move to be dramatic in either direction."

Currencies and Commodities

  • The U.S. dollar index is up 0.4% ahead of the bell, with the greenback lingering near 79.74.
  • Amid rising geopolitical tensions overseas, crude oil is on pace to continue its march higher. At last check, the commodity was up 0.1% to trade at $102.71 per barrel.
  • Gold futures are higher, as well, with the malleable metal tacking on 0.3% in pre-market trading to hover around $1,322.80 an ounce.
Currencies and commodities

Earnings and Economic Data

Kicking off the week are retail sales and business inventories. Elsewhere, C will release quarterly earnings.

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