The Dow Jones Industrial Average (INDEXDJX:.DJI) is poised to pull back from Monday's triple-digit advance, despite a well-received dividend announcement from The Home Depot, Inc. (NYSE:HD). Meanwhile, the week's economic action starts to heat up this morning, with a pair of housing reports and an update on consumer confidence on tap. Additionally, a duo of Federal Reserve officials is slated to take the stage in both the first and second halves of the session.
Elsewhere, "The S&P 500 Index (SPX) broke to a new all-time high yesterday, so I would keep an eye on the 1,850 level -- a layer of former resistance that could be potential support going forward," said Schaeffer's Senior Trading Analyst Bryan Sapp. "One 'indicator' that bulls should take note of is the Russell 2000 Index (RUT). The RUT failed to break to a new high on Monday, but peaked right at 1,180, which is near the January highs. Going forward, the RUT's ability to hit new all-time highs would be a strong signal for the bulls."
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are sitting about 19 points below breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,446,605 call contracts traded on Monday, compared to 794,231 put contracts. The resultant single-session put/call ratio arrived at 0.55, while the 21-day moving average stayed at 0.60.
From the Trading Floor
"Despite the fact that equities continue to grind higher and hit fresh peaks yesterday, the CBOE Volatility Index (VIX) remains elevated," noted Sapp. "In the past, the 12 level has been a key support area for the index. However, the VIX currently sits near 14, which is over 15% higher than where you would 'expect' to see it with such strong action in stocks. To me, this shows continued disbelief toward the advance, as the VIX rallies when traders are buying put options on the S&P 500. As a contrarian, this is a good bullish signal."
Currencies and Commodities
Earnings and Economic Data
The Federal Housing Finance Agency (FHFA) house price index, the S&P/Case-Shiller home price index, and the Conference Board's consumer confidence index are due out today. Announcing quarterly earnings are HD, First Solar (FSLR), AMC Entertainment (AMC), Ariad Pharmaceuticals (ARIA), Boston Beer Co (SAM), Cracker Barrel (CBRL), Domino's Pizza (DPZ), Dreamworks Animation (DWA), Forest Oil (FST), Macy's (M), Martha Stewart Living (MSO), Office Depot (ODP), Papa John's (PZZA), Questcor Pharmaceuticals (QCOR), Seadrill (SDRL), Steven Madden (SHOO), T-Mobile (TMUS), and Toll Brothers (TOL).
The Case for Big Moves in IWM and QQQ
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