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Dow Jones Industrial Average Ticks Lower Ahead of ADP Data

A cooling yen helped Japan's Nikkei buck the bearish Asian trend

by 6/4/2014 8:09:57 AM
Stocks quoted in this article:

The Dow Jones Industrial Average (INDEXDJX:DJI) is poised to start the day in negative territory, as traders await the latest Automatic Data Processing (ADP) employment report -- often seen as a precursor to Friday's nonfarm payrolls number. Additionally, Wall Street is keeping a cautious eye trained overseas, ahead of tomorrow's highly anticipated European Central Bank (ECB) meeting, with speculation swirling over a potential new round of stimulus measures.

Elsewhere, "I continue to keep a close eye on the Russell 2000 Index (RUT) and how it acts at its 200-day moving average -- currently located at 1,120," said Schaeffer's Senior Trading Analyst Bryan Sapp. "The S&P 500 Index (SPX) closed near breakeven yesterday, while small-caps underperformed yet again. Bulls will want to see the RUT find some support here, and potentially lead the market higher going forward."

Plus, our Trading Topic of the Week -- Trading Low-Priced Options: DO buy higher-delta options. The closer an option's delta is to 1.00 (for a call, or negative 1.00 for a put), the likelier it is that the option will retain some intrinsic value at expiration. This offers you some "insurance" against the possibility of a total loss.

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 12 points below breakeven.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 811,243 call contracts traded on Tuesday, compared to 468,995 put contracts. The resultant single-session put/call ratio fell to 0.58, while the 21-day moving average dipped to 0.62.

NYSE and Nasdaq summary

Volatility indices

From the Trading Floor

"Big blocks of index and exchange-traded fund (ETF) puts hit the tape yesterday, including one trade of 25,000 July 105-strike puts on the iShares Russell 2000 ETF (IWM)," continued Sapp. "It appears that there are some major market participants looking for a significant pullback in the near future."

Currencies and Commodities

  • The U.S. dollar index is little changed ahead of the bell, with the currency last seen at 80.55.
  • Ahead of today's weekly inventories update, crude oil is up 0.6% to trade at $103.31 per barrel.
  • Elsewhere, gold futures are signaling a second straight day of gains, with the commodity 0.1% higher at $1,245.80 an ounce.
Currencies and commodities

Earnings and Economic Data

The ADP employment report for May, the ISM non-manufacturing index, and the Federal Reserve's Beige Book will be released today, as well as April's international trade balance, first-quarter productivity and unit labor costs, and the regularly scheduled crude inventories report. Five Below (FIVE), Hovnanian Enterprises (HOV), and PVH Corp (PVH) will enter the earnings confessional.

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