What a great close to the week for our followers as we closed out +265% in profits over the last two sessions. Mostly strong earnings reports and increasing evidence of recovery in the euro zone helped propel the SPX Index above the 1,100 and we were positioned perfectly. Also the Dow finally surpassed 10,400 again. The Dow bounced back from the previous week’s 1% loss, by gaining over 3%. Earnings season has been the driver for the bulls.
There remains plenty of skepticism over this market and that was brought out by Reserve Chairman Ben Bernanke on Wednesday when he called the economic outlook “unusually uncertain.” Nonetheless, earnings for the most part have come in better than expected and the market is showing some signs of life. The positive part is that he PX finally broke above it’s 50-day moving average and out of a downward channel. This is very positive.
What I do find encouraging is the fact that the S&P 500 Index (SPX) was able to substantially break above its 50-day moving average, along with breaking a three-month downtrend line. Again, we have some major concerns regarding the world economy – but price action is what matters, and this is a step in the right direction for the bulls.
We’re certainly not seeing an “all clear” signal form the market but it makes sense to ride with the bulls for the time being. We are bullish this week.
Weekly Economic Calendar:
Monday
- We’ll kick off the week with new homes sales for June on Monday. Sohu.com Inc. (SOHU), Lorillard Inc. (LO), SL Green Realty Corp. (SLG), Albemarle Corp. (ALB), and Universal Health Services Inc. (UHS) will release their quarterly earnings reports.
Tuesday
- On Tuesday, we’ll get the Case-Shiller 20-city home price index for May, but more importantly, the Conference Board’s Consumer Confidence Index for July. If you recall, this index slumped badly in June. AK Steel Holding Corp. (AKS), BP plc ( BP), CIT Group Inc. (CIT), Cummins Inc. (CMI), Domino’s Pizza Inc. (DPZ), DuPont (DD), L-3 Communications Holdings Inc. (LLL), LCA-Vision Inc. (LCAV), Lexmark International Inc. (LXK), Office Depot Inc. (ODP), Lockheed Martin Corp. (LMT), United States Steel Corp. (X), Teva Pharmaceutical Industries Ltd. (TEVA), Under Armour Inc. (UA), Valero Energy Corp. (VLO), Aetna Inc. (AET),AFLAC Inc. (AFL) , Broadcom Corp. (BRCM), Buffalo Wild Wings (BWLD), CB Richard Ellis Group Inc. (CBG) Cephalon Inc. (CEPH), DreamWorks Animation SKG Inc. (DWA), Fiserv Inc. (FISV), Massey Energy Co. ( MEE) and Panera Bread Co. (PNRA) are scheduled to report earnings.
Wednesday
- The market will get the weekly report on U.S. petroleum supplies on Wednesday, while ArcelorMittal (MT), The Boeing Company (BA), Coca-Cola Enterprises Inc. (CCE), Comcast Corp. (CMCSA), ConocoPhillips (COP), Constellation Energy Group Inc. (CEG), International Paper Company (IP), M/I Homes Inc. (MHO), Martha Stewart Living Omnimedia Inc. (MSO), P.F. Chang’s China Bistro (PFCB), Sprint Nextel Corp. (S), Akamai Technologies Inc. (AKAM), Cincinnati Financial Corp. (CINF), Cliffs Natural Resources Inc. (CLF), Goldcorp Inc. (GG), Green Mountain Coffee Roasters Inc. (GMCR), NetLogic Microsystems Inc. (NETL), Skechers USA Inc. (SKX), and Sturm, Ruger & Co. (RGR) will post their quarterly results.
Thursday
- Weekly initial jobless claims will be joined by the Fed’s Beige Book on Thursday. Avon Products Inc. (AVP), Barrick Gold Corp. (ABX), Celgene Corp. (CELG), Colgate-Palmolive Co. (CL), Exxon Mobil Corp. (XOM), Motorola Inc. (MOT), Northrop Grumman Corp. (NOC), Sony Corp. (SNE), Strayer Education Inc. (STRA), Wynn Resorts Limited (WYNN), Chiquita Brands International Inc. (CQB), Coinstar Inc. (CSTR), Expedia Inc. (EXPE), First Solar Inc. (FSLR), McAfee Inc. (MFE), and MetLife Inc. (MET) will report earnings.
Friday
- On Friday, we’ll get the latest numbers on second-quarter gross domestic product, along with the Chicago Purchasing Managers’ Index for July, and a final look at July consumer confidence as measured by Reuters and the University of Michigan. Joining the earnings parade will be Arch Coal Inc. (ACI), Chevron Corp. (CVX), ITT Corp. (ITT), and Merck & Co. Inc. (MRK).
New Trade Idea:
Buy Manitowoc (MTW) August 10 Calls @ $0.95 or better:
Manitowoc is breaking out on nice volume. We should see a nice pop early this week. Use $1.55 as a target and $0.45 as a mental stop-loss.
Buy NetApp (NTAP) August 43 Calls @ $1.90 or better:
Another stock breaking out with the volume perking up. Seeing new highs here. Use $3.00 as a target and $0.90 as a mental stop-loss.
Open Positions:
Sandisk (SNDK) August 45 Put @ $2.80:
Opened at $5.20 on 07/23. Target Hit. +86% Profit!!
Aruba Networks (ARUN) August 15 Calls @ $1.25:
Target hit for a 100% profit!!!
Buy Green Mountain Coffee (GMCR) August 28 Calls @ $1.45
Target hit on 07/22 for a +79% profit!!!
TEN Exclusive: Options Update – 7/25/10 is an article from: 
