The S&P 500's seven-week winning streak has come to an end, so it will be interesting to see if the Dow can hold after eight straight weeks in positive territory -- and closing at yet another 30-month high.
The Dow Jones Industrial Average ended up 49.04 points, or 0.41%, to close at 11,871. The S&P 500 rose 3.09 points, or 0.24%, to close at 1283, and the NASDAQ was down 14.75 points, or 0.55%, to finish at 2689. Among key S&P 500 sectors, industrials, financials and energy gained, while technology slid.
The dollar fell against a basket of currencies as the euro gained, hitting a two-month high. Gold, meanwhile, closed lower for a third week, falling 1.43% to $1,341 an ounce.
CBOE Volatility Index ( VIX) closed up 2.67%, at 18.46, on overall put volume of 130,000 contracts compared to 177,000 call contracts, with February 17 puts as the most active series on 41,300 contracts. 60 and 90-day implied volatility is trading at 73 and 69, respectively, indicating decreasing longer-term price movement.
The VIX fully recovered the loss suffered last week ahead of some event risk next week including: a ton of earnings reports, Consumer Confidence, New Homes Sales, Durable Goods, GDP Data, as well as an FOMC meeting on rates Tuesday and announcement on Wednesday. All of these events and the S&P breaking its winning streak are good catalysts to bring some volatility back into the market.
SPDR S&P 500 ETF ( SPY) volatility remains low, indicating premium selling traders are confident of stable-to-higher market prices. SPY closed up $0.29, at $128.37, on 1.46 million put contracts compared to 797,000 call contracts, with January 128 puts as the most active series. 60 and 90-day implied volatility is at 16 and 17, respectively, indicating little outer price movement.
PowerShares QQQ Trust ( QQQQ) traded 2x its average daily volume to close down $0.43, at $55.68, on overall put volume of 476,000 put contracts compared to 243,000 call contracts, with January 56 puts as the most active series. 60 and 90-day implied volatility are at 19 and 20, also suggesting little outer price movement.
The Four Horsemen of banks overall option implied volatility traded near 40-month lows: Bank of America ( BAC) 37, Citigroup ( C) 35, JPMorgan Chase ( JPM) 27 and Wells Fargo ( WFC) 29.
Events for the week of January 24:
¿ Tuesday: November Case-Shiller 20-city Index, January Consumer Confidence, November FHFA Housing Price Index
¿ Wednesday: MBA Mortgage Purchase Index, December New Home Sales, Crude Inventories, January FOMC Rate Decision
¿ Thursday: Initial Claims, December Durable Orders, November Pending Home Sales
¿ Friday: Q4 GDP-Adv, Q4 Chain Deflator-Adv, Q4 Employment Cost Index, January Michigan Sentiment - Final
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