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Hot Stock News for Options Traders

Dow Jones Industrial Average Slips as Bulls Take a Breather

Most Asian bourses retreated ahead of Chinese PMI data

by 5/30/2014 8:08:45 AM
Stocks quoted in this article:

"Equities grinded higher on Thursday, as traders cautiously continued to bid shares up on fears of missing a broader-based rally, and by the close the Dow Jones Industrial Average (INDEXDJX:DJI) had posted a modest advance," said Schaeffer's Senior Options Strategist Tony Venosa, CMT. "What's more, despite a preliminary first-quarter gross domestic product (GDP) reading of negative 1%, the S&P 500 Index (SPX) notched yet another all-time closing high." In today's session, the DJI and the SPX are poised to consolidate a portion of these gains, with futures on both indexes sitting slightly below breakeven.

After a slow start to the week, traders will have a number of items to hold their attention today, including updates on personal income and spending, Chicago business activity, and consumer sentiment. Additionally, incoming Cleveland Fed President Loretta Mester is set to speak at 12:30 p.m. ET, while, separately, a trio of Federal Reserve officials will take the podium at an economic and banking conference in California.

Plus, our Trading Topic of the Week -- Tips for Buying Weekly Options: Focus on liquid names with narrow bid/ask spreads. There are two major benefits here -- ease of entry and exit, and lower risk of slippage.

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 13 points below breakeven.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 1,036,011 call contracts traded on Thursday, compared to 543,871 put contracts. The resultant single-session put/call ratio fell to 0.52, while the 21-day moving average slipped to 0.63.

NYSE and Nasdaq summary

Volatility indices

From the Trading Floor

"One sentiment indicator that is starting to signal some optimism is the American Association of Individual Investors (AAII) survey, which shows bulls bouncing to a 10-week high," continued Venosa. "Although not yet at an extreme, we will continue to monitor this in the weeks ahead."

Currencies and Commodities

  • The U.S. dollar index has shed 0.1% in pre-market trading, with the currency last seen hovering near 80.45.
  • Elsewhere, crude oil is on pace to pare a portion of Thursday's gains, with the commodity down 0.4% at $103.12 per barrel.
  • Gold, meanwhile, is positioned for a fifth consecutive day of losses, with the malleable metal 0.3% lower at $1,253.50 an ounce.
Currencies and commodities

Earnings and Economic Data

The week closes out with personal income and spending data, the Chicago purchasing managers index (PMI), and the Thomson Reuters/University of Michigan final consumer sentiment report for May. Ann Inc (ANN) and Big Lots (BIG) are slated to report earnings.

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