The Dow Jones Industrial Average continued its march higher and managed to hold on to the 11,000 level. Corporate earnings were solid this past week but it appears that investors are pausing a bit ahead of the upcoming mid-term elections and may be waiting for more details of Chairman Bernanke’s “further action” that he signaled will be forthcoming in his speech on Friday. Whatever action the fed does take will most likely come after the mid-term elections.
There are still plenty of reasons to remain bullish on this current market. We still see lots of short positions that will have to be covered if this upward move continues. We also see plenty of money on the sidelines or sitting in bonds that will have to join the party if the rally continues. Same goes for fund managers that have been overly cautious to this point. They can’t afford to miss too much more of this move.
Technically the SPX could have a clear run to the 1200 level once it clears this near-term hurdle at 1182. We have stronger resistance at 1205 and then all the way up at 1230. We think we could see 1230 this month if everything falls into place.
We remain bullish as we enter this new week.
Weekly Economic Calendar:
Monday
- The Federal Reserve will report industrial production numbers for September, while the National Association of Home Builders will issue its October Housing Market Index, a measure of builder confidence. Citigroup Inc. (C), Halliburton Co. (HAL), Hasbro Inc. (HAS), McMoRan Exploration Co. (MMR), Apple Inc. (AAPL), IBM Corp. (IBM), VMware Inc. (VMW), and Zions Bancorporation (ZION) will report earnings.
Tuesday
- The Commerce Department will release housing starts and building permits data for September. American Electric Power Co. Inc. (AEP), Bank of America Corp. (BAC), The Bank of New York Mellon Corp. (BK), The Coca-Cola Company (KO), EMC Corp. (EMC), Goldman Sachs Group Inc. (GS), Harley-Davidson Inc. (HOG), Illinois Tool Works Inc. (ITW), Johnson & Johnson (JNJ), Lockheed Martin Corp. (LMT), The New York Times Co. (NYT), Occidental Petroleum Corp. (OXY), Parker-Hannifin Corp. (PH), Peabody Energy Corp. (BTU), State Street Corp. (STT), Supervalu Inc. (SVU), UnitedHealth Group Inc. (UNH), Weatherford International Ltd. (WFT), Altera Corp. (ALTR), Boston Scientific Corp. (BSX), Intuitive Surgical Inc. (ISRG), Juniper Networks Inc. (JNPR), SLM Corp. (SLM), Tupperware Brands Corp. (TUP), Western Digital Corp. (WDC), and Yahoo! Inc. (YHOO) are scheduled to issue their quarterly reports.
Wednesday
- The usual weekly report on U.S. petroleum supplies, along with the Fed’s Beige Book for October will be released. Scheduled to report earnings are Abbott Laboratories (ABT), BlackRock Inc. (BLK), The Boeing Co. (BA), Comerica Inc. (CMA) Delta Air Lines Inc. (DAL), Eaton Corp. (ETN), Genzyme Corp. (GENZ), Manpower Inc. (MAN), Media General Inc. (MEG), Stanley Black & Decker Inc. (SWK), US Airways Group Inc. (LCC), U.S. Bancorp (USB), Wells Fargo & Co. (WFC), E*Trade Financial Corp. (ETFC), eBay Inc. (EBAY), Netflix Inc. (NFLX), Seagate Technology plc (STX), and Xilinx Inc. (XLNX).
Thursday
- The Labor Department will release the weekly new jobless claims figures. Meanwhile, the Conference Board will report on September leading indicators, and the Philadelphia Fed will provide a look at manufacturing in its region in October. In the earnings spotlight will be Alaska Air Group Inc. (ALK), AT&T Inc. (T), BB&T Corp. (BBT), Caterpillar Inc. (CAT), Freeport-McMoran Copper & Gold Inc. (FCX), Cirrus Logic Inc. (CRUS), Danaher Corp. (DHR), Eli Lilly & Co. (LLY), Entergy Corp. (ETR), Fifth Third Bancorp (FITB), Goodrich Corp. (GR), The Hershey Co. (HSY), Huntington Bancshares Inc. (HBAN), ITT Educational Services Inc. (ESI), JetBlue Airways Corp. (JBLU), Patriot Coal Corp. (PCX), Philip Morris International Inc. (PM), PNC Financial Services (PNC), PPG Industries Inc. (PPG), Southwest Airlines Co. (LUV), SunTrust Banks Inc. (STI), The Travelers Companies Inc. (TRV), Union Pacific Corp. (UNP) United Parcel Service Inc. (UPS), W.R. Grace & Co. (GRA) Xerox Corp. (XRX), Amazon.com Inc. (AMZN), American Express Co. (AXP), Capital One Financial Corp. (COF), The Cheesecake Factory Inc. (CAKE), Chipotle Mexican Grill Inc. (CMG), The Chubb Corp. (CB), Citrix Systems Inc. (CTXS), NCR Corp. (NCR), and SanDisk Corp. (SNDK).
Friday
- There are no major economic reports scheduled for Friday. Honeywell International Inc. (HON), KeyCorp (KEY), Schlumberger Limited (SLB), and Verizon Communications Inc. (VZ) will report earnings.
New Trade Idea:
Buy Nordstrom (JWN) November 40 Call @ $1.45 or Better:
We continue to like certain retail names and we think JWN is ready to make a move here. They continue to post good monthly figures and volume in the stock has been solid. We think the selling has exhausted itself here and we’ll use $2.65 as a target and $.90 as a mental stop-loss.
Open Positions:
Oracle (ORCL) November 28 Call @ $0.90:
Continue to hold. Use $1.65 as a target and $0.45 as a mental stop-loss.
Wells Fargo (WFC) November 26 Call @ $1.50:
This play has been closed.
Buffalo Wild Wings (BWLD) November 50 Call @ $2.30:
Continue to hold. 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.
Broadcom (BRCM) November 37 Calls @ $2.10:
Use $3.50 as a target and $1.05 as a mental stop-loss.
TEN Exclusive: Options Update – 10/17/10 is an article from: 
