Markets End Mixed as Investors Consider QE3
Stocks traded in a narrow range most of the session amid light volume Monday to end mixed, as investors considered the Federal Reserve's talk surrounding QE3. Regardless of the Fed's intentions and media hype surrounding further stimulus, it is most prudent for the investor to trade accordingly and understand the tape.
The Dow Jones Industrial Average ended down 19.90 points, or 0.17%, to close at 11,362. The S&P 500 fell 1.59 points, or 0.13%, to close at 1223, and the NASDAQ was up 3.46 points, or 0.13%, to finish at 2594. Among key S&P 500 sectors, health care, utilities and consumer staples fell, while energy and technology rose.
The Dollar Index (DXY) moved higher against a basket of currencies. Gold soared and is now trading at a historical high in the futures market, due to the prospects of continued Fed easing and euro zone worries, as did silver, which traded at a 30-year high.
The CBOE Volatility IndexI:VIX closed up 0.4%, at 18.08, on overall put contract volume of 95,200 compared to 89,900 call contracts. 30-day implied volatility is at 79, 60-day IV at 75 and 90-day IV at 67, indicating decreasing price movement.
The SPDR S&P 500 ETF (SPY) - Get Report closed down $0.13, at $122.76, on 626,900 put contracts compared to 431,300 call contracts. 30-day implied volatility is at 16, 60-day IV at 17 and 90-day IV at 18, suggesting increasing price movement.
The PowerShares QQQQ Trust (QQQQ) closed down $0.03, at $53.85, having traded 147,400 puts contracts compared to 118,500 call contracts. 30-day implied volatility is at 19, 60-day IV at 19 and 90-day IV at 21, also indicating increasing price movement.
Looking ahead to Tuesday and for the remainder of the week, Washington will command investor attention, particularly in the areas of deficit slashes and tax cuts. Developments in Europe will likely stay in the headlines, as economists and analysts debate which measures would lift the eurozone out of its current debt problems. Asian economic news will also grab attention, particularly with regard to the pace of economic growth in China. That nation is due to release its trade data on Friday, although Chinese officials occasionally issue reports earlier than announced.
The following economic data are expected to be released Tuesday: ICSC Goldman Store Sales due out at 7:45 a.m. EST, Redbook at 8:55 a.m. EST, Bank of Canada Announcement at 9:00 a.m. EST and Consumer Credit at 3:00 p.m. EST. Notable companies reporting before the open include: AZN, BMO, LDR, MTN, TLB and TTC; after the close: CASY, COO, HRB and MW.
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