"The bears had their chance early, but in the end, the bulls once again took charge," summarized Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. The Dow Jones Industrial Average (DJI) ended on a high note, closing near its intraday peak after marching steadily north during the second half of the trading day.
Continue reading for more on today's market, including:
After a fleeting trek below breakeven in late-morning trading, the Dow Jones Industrial Average (DJI) powered higher the rest of the day, closing just off its intraday peak with a gain of 81 points, or 0.6%. The Dow is now fewer than 200 points away from overtaking its October peak. The index's rally was far-reaching, as 25 of the 30 components powered higher on the day. Pacing the advancing majority was Bank of America (NYSE:BAC), which bounded back from yesterday's backslide with a 3.1% gain. On the flip side was Alcoa (NYSE:AA), which responded to a brokerage downgrade with a 1.2% pullback.
The S&P 500 Index (SPX) got within a chip-shot of marking a new five-year high but settled for a gain of 11 points, or 0.8%. The Nasdaq Composite (COMP) slightly lagged its index brethren, advancing 16 points, or 0.5%.
The CBOE Market Volatility Index (VIX) avoided another multi-year low but did close off 0.3 point, or 2.4%, slightly off its intraday low of 13.33.
A Trader's Take:
"Although there wasn't any one major driver on the day, we took another step in the right direction," asserted Detrick. "You want to see weakness early, followed by late-day buying. Plus, when small-caps and mid-caps make new all-time highs, it can't be that bad of a day. Also," Detrick added, "we are one day closer to [Schaeffer's Senior Equity Analyst] Joe Bell's first-ever live television appearance. He'll be on FOX Business Network tomorrow at 4:00 p.m. Eastern -- tune in and see how my boy does!"
3 Things to Know About Today's Market:
Plus ... The 2013 Oscar nominations were released today, and "Lincoln" led the way with 12 Academy Award nods, including best picture, best director for Steven Spielberg, and best actor for Daniel Day-Lewis, who tackled the titular role. Among the most high-profile snubs included directors Kathryn Bigelow, Quentin Tarantino, and Ben Affleck (for "Zero Dark Thirty," "Django Unchained," and "Argo," respectively), and -- once again -- Leonardo DiCaprio for his villainous turn in "Django."
Today's Top Tweet:
"...while the indices are consolidating, take advantage of individual stocks. You have to put in the work to find them."
@jfahmy, (Joseph Fahmy), 2:23 p.m.
5 Stocks We Were Watching Today:
Question of the Day:
Q: What happens if the put I purchased is in the money when it expires?
A: Any option that is in the money by $0.01 or more is automatically exercised by the Options Clearing Corporation (OCC), unless you notify your brokerage firm otherwise. If you have bought a put and are automatically exercised, you will be required to deliver the shares from your account at the strike price. If you do not own the underlying stock, as many put buyers do not, your broker will add a short stock position in your account. This open short position leaves you vulnerable if the stock opens higher on Monday. The situation becomes even more complicated if you do not have the funds in your account required to buy the shares. In nearly all cases, you are better selling the option outright ahead of expiration.
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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