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."
Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) are about 12 points below breakeven.
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.
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
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.
The Case for Big Moves in IWM and QQQ
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