"We bounced today after yesterday's huge sell-off, but to say we're out of the woods is anything but true," reported Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. The Dow Jones Industrial Average (DJI) made modest headway today and held above breakeven for most of the session. "Later this week, we'll hear an interest-rate decision from the European Central Bank, and the monthly jobs data from January is due here at home. So the recent volatility could be here to stay for the next few days."
Continue reading for more on today's market, including:
The Dow Jones Industrial Average (DJI - 15,445.24) recovered some of yesterday's losses, adding 72.4 points, or 0.5%, by the close. Two pharmaceutical heavyweights -- Merck & Co, Inc. (NYSE:MRK) and Pfizer Inc. (NYSE:PFE) -- led the 19 Dow advancers, each posting a 2.8% gain. The 11 laggards were paced by United Technologies Corporation's (NYSE:UTX) 1% loss.
The S&P 500 Index (SPX - 1,755.20) also fought back, jumping 13.3 points, or 0.8%. Elsewhere, the Nasdaq Composite (COMP - 4,031.52) eased back above the 4,000 level to settle with a gain of 34.6 points, or 0.9%.
The CBOE Volatility Index (VIX - 19.11) collapsed after Monday's spike higher, shedding 2.3 points, or 10.9%, and putting in an intraday low of 18.44.
A Trader's Take:
"Recent action in the VIX has been very interesting," Detrick noted. "As we know, spikes in the VIX can mark market bottoms -- they can show a good deal of fear, as option players are willing to pay up for the price of protection. Yesterday, the VIX spiked past 21, before selling off today and closing beneath the 20 mark. This is significant because the past few VIX spikes all went up to about 21, then sold off hard. Today is just one day, but if you were looking for a bullish point to help you sleep tonight, that is it."
5 Items on Our Radar Today:
For a look at today's options movers and commodities activity, head to page 2.
The Case for Big Moves in IWM and QQQ
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