Dow Jones Industrial Average on Eggshells as Oil Bounces

The Dow Jones Industrial Average (DJIA) is signaling another fragile session, with futures on the blue-chip barometer pointed lower ahead of the bell. Traders will be keeping a close eye on crude oil, with September futures up about 2% in electronic trading following Monday's sharp decline. Additionally, with factory orders the sole economic report on the day's docket -- ahead of some key data due later this week -- the latest round of corporate earnings should draw some attention.

 

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

 

• Schaeffer's Senior VP of Research Todd Salamone uncovers the S&P pattern that no one is talking about.
• Is this little-known volatility vehicle a better choice than iPath S&P 500 VIX Short-Term Futures ETN (VXX)? Schaeffer's contributor Adam Warner investigates.
• Negative pre-earnings analyst attention sent this retailer and its sector peer tumbling to new lows.
• Plus … 5 things you need to know this morning -- including stocks making waves, what's happening overseas, and the latest in unusual option activity.

 And now, on to the numbers…

 

 

Futures on the Dow Jones Industrial Average (DJIA) are more than 14 points below fair value.

 

5 Things You Need to Know Today

1. Stocks in China bounced back, after regulators stepped in with a fresh round of short-selling restrictions.
2. CBOE Volatility Index (VIX) calls outpaced puts by a more than 2-to-1 margin yesterday. According to Trade-Alert, one speculator appears to have sold 70,000 August 12.50 puts in order to fund a the purchase of a long call spread at the August 16 and 18 strikes. VIX closed Monday up 3.6% at 12.56.
3. Apple Inc. (NASDAQ:AAPL) has officially entered correction territory -- closing at $118.44 on Monday, or 10.9% below its Feb. 23 record close of $133. The stock, which also settled below its 200-day moving average yesterday for the first time since September 2013, has recently suffered from a poorly received earnings report -- and looks poised to extend this rout today, down 1% in electronic trading.
4. After settling with steep losses yesterday -- its first trading session in more than five weeks -- the Athens Stock Exchange plunged nearly 5% out of the gate today. The benchmark has since pared a portion of this deficit, and was last seen around 1.4% lower.
5. It's already been a big week on the M&A front, and today, shares of biopharmaceutical firm Baxalta Inc (NYSE:BXLT) are up 16% ahead of the bell -- and on their way to record-high territory -- after the company received a roughly $31 billion bid from Shire PLC (ADR) (NASDAQ:SHPG). SHPG, meanwhile, is down 5% in electronic trading, after being halted earlier.

Market Statistics

• Transocean LTD (NYSE:RIG), Twitter Inc (NASDAQ:TWTR), and Sunedison Inc (NYSE:SUNE) were among the equities with unusual call and put activity on Monday. For the entire list, read Unusual Options Activity: TWTR, DIS, RIG, COH, and KORS.
• The Chicago Board Options Exchange (CBOE) saw 775,995 call contracts traded on Monday, compared to 569,751 put contracts. The resultant single-session equity put/call ratio rose to 0.73, while the 21-day moving average edged up to 0.68.
• For info on currencies, commodities, trading volume, market breadth, and more, read Stock Market Stats for August 3, 2015.

Earnings and Economic Data

 

Factory orders for June are the sole data point on today's docket. Reporting earnings are Walt Disney (DIS), Etsy (ETSY), First Solar (FSLR), Zillow (Z), Aetna (AET), Archer Daniels Midland (ADM), Beazer Homes USA, Inc. (BZH), Caesars Entertainment (CZR), Coach (COH), CVS Health Corp. (CVS), Devon Energy (DVN), Dreamworks Animation (DWA), Glu Mobile (GLUU), HomeAway (AWAY), Kellog (K), MBIA (MBI), MGM Resorts (MGM), Momenta Pharmaceuticals (MNTA), Mosaic (MOS), Office Depot Inc (ODP), Papa John's (PZZA), Regeneron (REGN), and Sprint (S). To see what else is on this week's agenda, click here.