Today we saw another low-volume session that ended on an encouraging note. Stocks initially started the session lower today, but once again we saw the bulls step in and buy the dips. Today the New York Federal Reserve Bank said its Empire State manufacturing index fell to 4.1 in September from 7.1 in August, defying expectations for a rise to 7.5 and marking the index’s lowest reading since July 2009. In a separate report, the Fed said U.S. industrial production slowed from July to August, though the bulls took solace in the 14th straight month of expansion.
The SPX has not yet reached the important level of resistance around 1131 but we may very well see that happen this week. Tomorrow we will get some important economic and corporate reports that could provide the boost we need. We can’t get too excited but the signs are there that this market is ready to make another leg higher.
We are cautiously and patiently bullish.
Weekly Economic Calendar:
Thursday
- We’ll get the weekly report on new jobless claims, the producer price index for August, and the Philadelphia Fed’s report on manufacturing activity in that region. FedEx Corp. (FDX), Pier 1 Imports Inc. (PIR), Oracle Corp. (ORCL), and Research in Motion Limited (RIMM) will report earnings.
Friday
- The Labor Department will deliver the August consumer price index, while the University of Michigan will give its first peek at consumer sentiment in September. There are no earnings reports scheduled for Friday.
New Trade Idea:
Buy Wells Fargo (WFC) October 26 Call @ $1.20 or Better:
Nice move above the 50-day moving average today with decent volume. The stock looks like it will test the $28 level by the weekend. Use $2.10 as a target and $0.70 as a mental stop loss.
Buy Sandisk (SNDK) October 39 Call @ $2.55 or Better:
A nice move this week and the stock should see $40 soon. We’ll use $4.70 as a target and $1.45 as a mental stop-loss.
Buy Netflix (NFLX) October 130 Put @ $3.60 or Better:
Finally Netflix looks ready to rollover after a monster 2-week move. A rumor that the company will have to do a secondary offering to fund its future is weighing on the stock. Use $7.00 as a target and $1.85 as a mental stop-loss.
Open Positions:
None
TEN Exclusive: Options Update – 9/15/10 is an article from: 
