After a four-day rally, the Dow Jones Industrial Average (INDEXDJX:.DJI) is poised to take a breather today, with the blue-chip index flirting with the flatline ahead of the bell. On the home front, investors are weighing news that the U.S. House of Representatives voted to suspend the debt ceiling until March 2015, and are awaiting earnings from Dow component Cisco Systems, Inc. (NASDAQ:CSCO) after the close. Overseas, meanwhile, traders are applauding solid export data out of China, and a rosy economic outlook from the Bank of England.
"The S&P 500 Index (SPX) boldly retook the 1,800 level, so that former resistance level should now act as support going forward," noted Schaeffer's Senior Trading Analyst Bryan Sapp. "Overhead, the next big level is 1,850, which is the site of the all-time highs that were rejected in January."
Futures on the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) are roughly 9 points below breakeven.
The Chicago Board Options Exchange (CBOE) saw 1,282,550 call contracts traded on Tuesday, compared to 707,889 put contracts. The resultant single-session put/call ratio fell to 0.55, while the 21-day moving average remained at 0.59.
From the Trading Floor
"Despite the extreme recent strength in stocks, I'm not very impressed by the action underneath the surface," Sapp continued. "Small-cap stocks continue to lag other major sectors, and for the past two days, gold and mining stocks have led the rally. Before getting heavily involved on the long side again, and for the market to give the 'all clear,' I'd like to see some leadership by small-cap cyclical names."
Currencies and Commodities
Earnings and Economic Data
Weekly crude inventories and the Treasury budget will hit the Street today. Scheduled to post earnings are CSCO, Angie's List (ANGI), Alpha Natural Resources (ANR), Applied Materials (AMAT), CBS Corporation (CBS), Cheesecake Factory (CAKE), Deere (DE), Kinross Gold (KGC), Lorillard (LO), NetApp (NTAP), NVIDIA (NVDA), Pinnacle Entertainment (PNK), Skechers USA (SKX), SunPower (SPWR), Whole Foods Market (WFM), Vonage (VG), and Zillow (Z).
The Case for Big Moves in IWM and QQQ
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