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Small-Caps Lead the Laggards as Intraday Volatility Continues

Crude spikes on supplies surprise, while gold sinks on dollar strength

by 3/26/2014 4:21:02 PM
Stocks quoted in this article:

"We once again had a day full of intraday volatility capped off with underperformance by small-caps and technology stocks," said Schaeffer's Senior Equity Analyst Joe Bell, CMT, as the Dow Jones Industrial Average (DJI) notched a loss of nearly 99 points. "It's almost becoming a repeat every day, as strength is met with selling pressure and buyers come to the table to buy the dips. Once the dust settles, there hasn't been a ton of net movement for the Dow and S&P 500 Index (SPX) -- but under the surface, there was some real weakness."

Continue reading for more on today's market, including:

Trading Topic of the Week -- Tips for Buying Weekly Options: Look for a catalyst. Check the stock's fundamental, technical, and sentiment data to pinpoint possible triggers for a big move.

The Dow Jones Industrial Average (DJI - 16,268.99) gave up intraday support at 16,300 in the final half-hour of trading, eventually tumbling to a loss of 98.9 points, or 0.6%. Only four of the Dow's 30 components closed higher, led by a 1.5% gain for Merck & Co., Inc. (NYSE:MRK). Microsoft Corporation (NASDAQ:MSFT) paced the 26 decliners with a 1.4% deficit.

The S&P 500 Index (SPX - 1,852.56) was also smacked by the eleventh-hour sell-off, ending on a drop of 13.1 points, or 0.7%. However, the Nasdaq Composite (COMP - 4,173.58) fared even worse. By the time the closing bell sounded, the tech-heavy index was off 60.7 points, or 1.4%.

The CBOE Volatility Index (VIX - 14.93) jolted higher as stocks stumbled. After a wobbly start to the session, the VIX wrapped up the day on a gain of 0.9 point, or 6.5%.



A Trader's Take:

"Durable goods orders improved in February after falling in January," noted Bell. "That was a nice upside surprise, but market participants will continue to monitor economic reports to see whether the improvement in weather will lead to a pick-up in economic activity. These reports are very important as investors continue to look for indications on just how soon the Fed might raise rates."

5 Items on Our Radar Today:

  1. U.S. orders for durable goods increased 2.2% last month compared to January, according to the Commerce Department. This was a welcome development for economists, as demand for long-lasting manufactured goods had declined in the two months prior to this latest report. However, optimism surrounding the data was tempered by an unanticipated 1.3% fall in orders for non-defense capital goods excluding aircraft, which are used to gauge future business spending. (Reuters)
  2. "Candy Crush" parent King Digital Entertainment Plc (NYSE:KING) flopped in its initial public offering (IPO), plummeting well below initial pricing levels to establish itself as the worst-performing IPO of 2014. However, CEO Ricardo Zacconi refused to let the setback temper his excitement, saying today was just "the start of a marathon." (CNBC)
  3. Despite its long-term technical strength, Under Armour Inc (NYSE:UA) continues to face doubt in the options pits and beyond.
  4. Call buying accelerated on Apple Inc. (NASDAQ:AAPL) as the stock added to its week-to-date gains.
  5. AOL, Inc. (NYSE:AOL) options pits were flooded with call buyers as the stock continued to make headway.

    For a look at today's options movers and commodities activity, head to page 2.

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