Dow Jones Industrial Average Set to Pop; Futures Up 151

Volatility continues for the Dow Jones Industrial Average (DJIA), as futures indicate the 30-stock index will follow up Tuesday's bruising loss with a sharp bounce. U.S. investors are no doubt looking forward to a break from the ongoing volatility in China, with mainland markets shuttered Thursday and Friday for the World War II Victory Parade. Back at home, traders will continue to try and read the rate-hike tea leaves. Following a weaker-than-forecast ADP jobs report this morning, the Federal Reserve's latest Beige Book report will shed more light on the state of the domestic economy this afternoon.

 

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

 

• Schaeffer's Senior Quantitative Analyst Rocky White explains why these 3 stocks could be set for big gains.
• Did volatility derivatives contribute to the recent market mayhem? Well, the VIX complex is "a bit of a tinderbox," notes Schaeffer's contributor Adam Warner.
• Why one vitamin vigilante is taking Chipotle Mexican Grill, Inc. (NYSE:CMG) to court.
• 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 151 points above fair value.

 

5 Things You Need to Know Today

 

1. It was another roller-coaster session for Chinese stocks today, though Hong Kong's benchmark index suffered the biggest daily drop.
2. The CBOE Volatility Index (VIX) bounced off its 10-day moving average Tuesday, ending the session up 10.5% at 31.40. Meanwhile, the iPath S&P 500 VIX Short-Term Futures ETN (VXX) surged 14.6% to $30.76, and hit an intraday high of $31.48 -- more than double VXX's record low of $15.48, which it tagged as recently as Aug. 5.
3. Ambarella Inc (NASDAQ:AMBA) has swallowed a pre-market loss of nearly 11% after issuing softer-than-forecast third-quarter revenue guidance. Earlier this week, AMBA options traders were pricing in a 12.3% post-earnings price swing.
4. Meanwhile, GoPro Inc (NASDAQ:GPRO) has shed more than 6% ahead of the bell, as supplier AMBA's gloomy guidance raises some red flags for analysts. Stifel slashed its earnings estimates for GPRO this morning, while Piper Jaffray trimmed its price target. Today's early losses continue a recent trend for GPRO, which has been struggling on the charts since mid-August.
5. Late Tuesday, Amgen, Inc. (NASDAQ:AMGN) said its experimental osteoporosis drug, romosozumab, outperformed Eli Lilly and Co's (NYSE:LLY) competing treatment in a late-stage trial. AMGN has tacked on 1.7% in electronic trading, while LLY -- which showed impressive resilience amid the recent broad-market pullback -- is also on track to open higher.

Market Statistics

 

•  J C Penney Company Inc (NYSE:JCP), Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA), and Arch Coal Inc (NYSE:ACI) were among the equities with unusual call and put activity on Tuesday. For the entire list, read Unusual Options Activity: JCP, K, ARIA, and ACI.
• The Chicago Board Options Exchange (CBOE) saw 738,242 call contracts traded on Tuesday, compared to 544,548 put contracts. The resultant single-session equity put/call ratio jumped to 0.74, while the 21-day moving average held at 0.77.
• For info on currencies, commodities, trading volume, market breadth, and more, read Stock Market Stats for September 1, 2015.

 

Earnings and Economic Data

 

Today's jam-packed docket includes the ADP private-sector jobs report, productivity and labor costs, factory orders, and weekly crude inventories. During the second half of the session, the Federal Reserve will release its Beige Book report on economic conditions.  

Among the names stepping into the earnings confessional are Five Below (FIVE), G-III Apparel (GIII), Isle of Capri (ISLE), Navistar (NAV), Planet Fitness Inc (PLNT), SeaChange (SEAC), and Vera Bradley (VRA). To see what else is on this week's agenda, click here.