Whee, what fun!
We got the S&P stick that kept us well and truly above 946 into the close. If we hold it for a couple of days, we won’t be calling it a “stick save,”we’ll be saying this was the day that 946 turned from resistance to support – a good chartist needs to travel tothe future,look backat today’s chartsand think about them in context of the follow-through move they expect. Looking further back in time, however, what we have so far is a double top on the S&P at the upper end of our primary range on very low volume. 956.23 was our June high and that still needs to be both taken out and held(preferably at decent volume) in order for us to don our rally caps for the next leg up.
I’m encouraged this morning that we may be able to do it though – CAT had great numbers, beating estimates of .22 by .38 per share, that’s very impressive for what was a $35 stock yesterday. Fellow Dow component KO had a nice beat as well as did DD, MRK and UTX, That’s 5 Dow beats in one day and yesterday we finished at 8,848 which is why I’m saying 8,900 or bust today. If we can’t add 52 little points on these earnings, then surely the rally into these earnings was overdone. If, on the other hand, we can hold 8,900 and build from there – then perhaps we are ready to move 8,650 to the bottom of our range and look to make a 10% move over that to 9,500, a mere 32% off the highs.
I’m excited because it’s almost time to pull out a brand new Big Chart with all new targets – if only we can prove this move is real. Let’s not get too ahead of ourselves but I was already very pleased with last night’s eanings when all 20 reporting companies beat estimates with PKG and TXN raising guidance of all things! This morning we also have both ICSC and Redbook Retail Sales reports and Bernanke gives the old Humphrey-Hawkins address to Congress against a very pretty market background which will hopefully overshadow TARP Czar Neil Barofsky, who will be reporting to Congress under the shadow ofhis “leaked” report that shows that the government’s POTENTIAL exposure under TARP is now $23.7 TRILLION. To get to that figure, Mr. Barofsky combined direct spending…