Dow Jones Industrial Average Ready to Bounce; Bond Yields Climb

Debunking Dow Theory

by Alex Eppstein

Published on Jun 10, 2015 at 8:34 AM

The Dow Jones Industrial Average (DJIA) is positioned to snap its four-day losing streak, with futures pointed higher ahead of the bell. With just a couple notable reports on the docket -- including the Treasury budget -- traders will keep an eye trained on rising bond yields, at home and in Europe. Speaking of which, after Greece's reform plan was rejected by international lenders, the stakes have been raised for today's planned meeting in Brussels between Greek, German, and French officials.

 

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

 

And now, on to the numbers…

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Futures on the Dow Jones Industrial Average (DJIA) are roughly 64 points above fair value.

Market Statistics

The Chicago Board Options Exchange (CBOE) saw 752,022 call contracts traded on Tuesday, compared to 470,424 put contracts. The resultant single-session equity put/call ratio edged up to 0.63, while the 21-day moving average remained at 0.62.

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Currencies and Commodities

  • The U.S. dollar index is down 0.2% at 94.99.
  • Crude oil has bounced 2.4% to trade at $61.56 per barrel, building on Tuesday's upward momentum.
  • Gold has added 0.7% at $1,185.60 per ounce.

 

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Earnings and Economic Data

 

Weekly crude inventories and the Treasury budget are due out today. Among the companies in the earnings lineup are Krispy Kreme (KKD) and Men's Wearhouse (MW). To see what else is on this week's agenda, click here.

 

Overseas Trading

 

Asian markets ended lower amid mounting U.S. rate hike fears. Also, disappointment over MSCI's decision to delay adding Chinese-listed A-shares to its emerging markets index -- and a reduced 2015 growth forecast from the People's Bank of China -- pressured the Shanghai Composite 0.2% lower. Elsewhere, Japan's Nikkei lost 0.3% on a stronger yen, Hong Kong's Hang Seng plunged 1.1%, and South Korea's Kospi gave back 0.6% amid the ongoing outbreak of Middle East Respiratory Syndrome (MERS).

 

European benchmarks are currently higher, despite Greece's inability to agree on a reform proposal with its international creditors and a big jump in Germany's 10-year bund yield. Specifically, London's FTSE 100 is up 0.4%, the German DAX has popped 1.1%, and France's CAC 40 is 0.9% higher, as traders shrug off a surprise drop in industrial production.

 

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Unusual Put and Call Activity

 

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