The bulls regained control last week and stretched the September rally into the fall. The DJIA managed to settle above 11,000 for the first time since early May and we see some indicators that are telling us that this market has more room to the upside.
Interestingly enough, the Dow had difficulty closing above the 11k level until we got Friday’s disappointing job figures. The report was set-up as a win-win for investors, as the market would rally off of a good number and would rally off of a bad number under the premise that the Fed would step-in sooner rather than later to prop up this recovery. Money continues to flow out of funds and stocks and into treasuries and money markets, telling us that people have little faith in this recent rally and that they are willing to take very little yield in return for safety. Eventually this money will return to the stock market and that is when we’ll see the rally in earnest.
We think that there is more upside left to this move and we should see 1200 on the SPX by mid-week. We’ll be watching the 1164 level early this week and 1151 for support.
We remain bullish.
Weekly Economic Calendar:
Monday
- There are no major economic reports scheduled for Monday. Global Payments Inc. (GPN) will report earnings.
Tuesday
- The Federal Open Market Committee will release the minutes of its most recent meeting on Tuesday. Fed officials have been offering broad hints about more quantitative easing, likely by increasing purchases of U.S. Treasury bonds. Traders will examine the entrails of the minutes for more clues. Fastenal Company (FAST), CSX Corp. (CSX), Intel Corp. (INTC) and Linear Technology Corp. (LLTC) are scheduled to issue their quarterly reports.
Wednesday
- We’ll get the usual weekly report on U.S. petroleum supplies, along with September import and export data and the Treasury’s budget numbers for September. Scheduled to report earnings are ASML Holding N.V. (ASML), JPMorgan Chase & Co. (JPM), and Apollo Group Inc. (APOL).
Thursday
- The Labor Department will release the weekly jobless claims figures, along with the September producer price index. The Commerce Department will report on the August trade balance. In the earnings spotlight will be Safeway Inc. (SWY), Advanced Micro Devices Inc. (AMD), Google Inc. (GOOG), J.B. Hunt Transport Service Inc. (JBHT), and The Progressive Corp. (PGR).
Friday
- Friday will be busy again, with September data available on the consumer price index and retail sales. The New York Fed will report on manufacturing in the region for October, while the University of Michigan will offer up its first reading on consumer sentiment in October. Gannett Co. Inc. (GCI), General Electric Co. (GE), Infosys Technologies Limited (INFY) and Mattel Inc. (MAT) will report earnings.
New Trade Idea:
Buy Oracle (ORCL) November 28 Call @ $0.90 or Better:
The techs are beginning to stir and Oracle looks poised to break out of this recent consolidation. Use $1.65 as a target and $0.45 as a mental stop-loss.
Open Positions:
Wells Fargo (WFC) November 26 Call @ $1.50:
The financials have finally perked up and could surprise over the earnings season. WFC has good support and plenty of room to run if the market continues to cooperate. Use $2.60 as a target and $0.85 as a mental stop-loss.
Buffalo Wild Wings (BWLD) November 50 Call @ $2.30:
Buffalo Wild Wings is threatening to breakout of this consolidation. It has good support at this level. Use $4.60 as a target and $1.30 as a mental stop-loss.
Juniper Networks (JNPR) Nov 30 Calls @ $1.80:
Continue to hold. Use $4.00 as a target and $.90 as a mental stop loss.
Salesforce (CRM) Oct 110 Calls @ $2.00:
Position has been closed.
TEN Exclusive: Options Update – 10/10/10 is an article from: 
