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Hot Stock News for Options Traders

Stocks Ease Higher, Led by the Tech Sector

Gold retakes the $1,300 level, oil settles at one-month high

by 4/8/2014 4:20:44 PM
Stocks quoted in this article:

"The S&P 500 Index (SPX) held the 1,840 area, which had been support since early March," observed Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. "After the drop the past three days, it was nice to see the bulls show some life. With many momentum names extremely oversold, a bounce could happen at any time. Still, you could have said that last week, and many continued to drop. Be very cautious out there." After three days in the red, the Dow Jones Industrial Average (DJI) spent time on both sides of the breakeven mark before ending with a minimal gain.

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

Trading Topic of the Week -- Tips for Trading Stock Trends: Confirm that there are still some skeptics on the sidelines. A solid uptrend is certainly impressive to look at, but a pretty chart alone doesn't guarantee a profitable trade. After all, a rally looks best right at the top.

The Dow Jones Industrial Average (DJI - 16,256.14) started the day slightly lower, popped into the green before noon, and hovered around the flat line before settling with an increase of 10.3 points, or less than 0.1%. Seventeen of the 30 Dow components gained ground today, led by a 3% rally in Nike Inc (NYSE:NKE). Bringing up the rear was Goldman Sachs Group Inc (NYSE:GS), which settled on a 1.3% decline.

The S&P 500 Index (SPX - 1,851.96) followed a similar morning path as its blue-chip brethren, but closed with a more impressive gain of 0.4%, or 6.9 points, retaking the 1,850 level. The Nasdaq Composite (COMP - 4,112.99) bounced on the heels of its worst three-session drop since 2011. At the close, the tech-rich index was up 33.2 points, or 0.8%.

The CBOE Volatility Index (VIX - 14.86) peeked into the green in early trading, but was otherwise mired south of breakeven, settling off 0.7 point, or 4.4%, to move back south of the 15 mark.



A Trader's Take:

"The rotation from higher momentum names and into steel and commodities continues," added Detrick. "It is important to remember the SPX is up five straight quarters and the Russell 2000 Index (RUT) is up a record seven quarters in a row. Some type of weakness or consolidation is perfectly healthy. Yes, we all know this bull market is five years old, but many forget that 2011 was exactly flat, yet earnings grew 14.5%. With the SPX pretty much flat for the year, could we be seeing a similar scenario play out?"

5 Items on Our Radar Today:

  1. The Job Openings and Labor Turnover Survey (JOLTS) revealed a better-than-expected increase in job openings in February. The number of open positions came in at 4.17 million, a six-year high. There remain about 2.5 unemployed Americans for each job opening. (Bloomberg)
  2. The International Monetary Fund (IMF) issued a projection that the global economy would continue to recover this year, despite escalating risks in emerging markets. In its twice-yearly outlook, the IMF forecast a 3.6% rise in global output this year, and a 3.9% growth rate for 2015. (Reuters, via CNBC)
  3. Minneapolis Federal Reserve President Narayana Kocherlakota admitted that he and his central bank peers "need to do better" with regard to low inflation and an employment market that remains "far from healthy." Kocherlakota cast the lone "nay" vote last month on the subject of abandoning objective guidelines for lifting interest rates. (FOX Business)
  4. Banking giants Bank of America Corp (NYSE:BAC) and Citigroup Inc (NYSE:C) faced negative attention from Wall Street today.
  5. An eBay Inc (NASDAQ:EBAY) option bull constructed a large spread with back-month options.

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

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