When the first quarter of 2010 ended last week, all three major indexes were higher by better than 4% and the Dow is now ready to challenge the 11,000 level. The market certainly slowed down the last two weeks of March and we are butting up against significant resistance here, but if April holds true to form we should blast through the 11,000 level fairly quickly. Looking ahead to Monday, trading could be influenced by Friday’s payrolls data which investors couldn’t react to due to eh markets being closed. Nonfarm payrolls increased by 162,000, below the forecasts of 200,000. The e-mini S&P futures were bid higher in the 45 minutes after the report, at which time they stopped trading. Traders may have been optimistic about a report that showed the biggest job growth in three years, but yet not “hot” enough to give the Fed thoughts of raising interest rates in the near future. We see short-term support for the SPX in the1,150-1,160 range. To the upside, we don’t see the 1180 level offering too much more resistance and we think the 1,200 area could provide the next major level of resistance. April has historically been a very good month for the market and we expect this trend to continue. We remain bullish. Weekly Economic Calendar: Monday
- The Institute for Supply Management’s (ISM) services index for March and February’s pending home sales data will be released. There are no major earnings reports slated for release.
Tuesday
- Tuesday brings the minutes from last month’s Federal Open Market Committee meeting. No major earnings reports are scheduled for release.
Wednesday
- The usual report on weekly U.S. petroleum supplies is joined by February’s consumer credit report. Family Dollar Stores Inc. (FDO), Monsanto Company (MON), and Bed Bath & Beyond Inc. (BBBY) will report earnings.
Thursday
- Thursday brings the weekly report on initial jobless claims. Pier 1 Imports Inc. (PIR) is scheduled to report earnings.
Friday
- Friday ends the week with February’s wholesale inventories. Constellation Brands Inc. (STZ) is slated to release its quarterly report.
New Trade Idea: Buy Tiffany & Company (TIF) May 50 Call @ $1.10 or better: Tiffany has made a nice move and is pushing against its upper bands. We expect retail to be solid this week and the high-end retailers should lead. Let’s use $2.10 to the upside as a target and a mental stop-loss of $0.65 as a protection to the downside. 
Buy Shanda Interactive (SNDA) May 45 Call @ $2.85 or better: Shanda is poised to break out of this bull flag formation it finds itself in. This is a fast moving stock and we could see an explosive move to the upside if the market cooperates. Use $5.00 as a target and $1.65 as a mental stop-loss to the downside. 
Open Positions: Buy Western Digital (WDC) April 39 Puts @ 1.20 or better: The stock is breaking support lines here and with an uncertain week ahead of us we could see a sharp pullback in the tech names. Continue to hold and use $2.00 as a target and .65 as a protective stop-loss. Research in Motion (RIMM) April 75 calls @ $3.20: This play was closed on Thursday.
Written by Dan Micovic
