"The Dow Jones Industrial Average (INDEXDJX:.DJI) rebounded strongly on Tuesday, after concerns over Ukraine and Russia were temporarily alleviated," commented Schaeffer's Senior Options Strategist Tony Venosa, CMT. "The S&P 500 Index (SPX) put in its best performance of the year, up over 1.5%, while the Russell 2000 Index (RUT) added 2.7%." In today's session, the blue-chip barometer is sticking close to the flat line, as investors await direction from a round of domestic economic data. Specifically, the latest Automatic Data Processing (ADP) employment report -- often seen as a precursor to Friday's jobs number -- the Institute for Supply Management's (ISM) non-manufacturing index, and the Fed's Beige Book are all on tap.
Additionally, Venosa says, "Watch for potential pullbacks to be supported at the $187 level on the SPDR S&P 500 ETF (SPY), as a number of put options that expire this Friday were purchased yesterday."
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are about 16 points above breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,293,919 call contracts traded on Tuesday, compared to 617,979 put contracts. The resultant single-session put/call ratio plunged to 0.48, while the 21-day moving average dropped to 0.59.
Currencies and Commodities
Earnings and Economic Data
The ADP employment report, ISM non-manufacturing index, and the Fed's Beige Book will be released today, as well as the regularly scheduled crude inventories report. Boyd Gaming (BYD), Canadian Solar (CSIQ), Hovnanian Enterprises (HOV), and PetSmart (PETM) will report earnings.
The Case for Big Moves in IWM and QQQ
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