The market sure did close the week out in style.  The Dow’s winning streak now stretches for an unbelievable four weeks, including a jaw-dropping statistic that the SPX has not had back-to-back don days for 19 sessions now.  That is truly amazing.

There has been a definite change in attitude in the markets and optimism is rapidly spreading.  The SPX easily broke out to four-month highs and looks poised to move even higher.  We’re beginning to hear chatter that optimism is too high and that a pullback is imminent.  That’s certainly something to keep an eye on but we are finally starting to see the much talked about “money on the sidelines” begin to come back into the market and that could help extend this rally.  We’re seeing equity accumulation.

Now that we have broken out above the 1130 resistance, the close we get to the year-end, the more we’ll see money managers come in with new money, afraid to miss a potential year-end rally.

We will look at 1131 as support on the SPX and we will use 1065 as overhead resistance.  As you can see, we still have a ways to go before we hit that resistance and we remain bullish, but we are susceptible to short and sharp pullbacks.

SPX Sept 26 2010

Weekly Economic Calendar:

Monday

  • There are no major economic reports scheduled for Monday. Cal-Maine Foods Inc. (CALM), Jabil Circuit Inc. (JBL), and Paychex Inc. (PAYX) will report earnings.

Tuesday

  • The Case-Shiller home price index for July and the Conference Board’s Consumer Confidence Index for September will be released Tuesday. Walgreen Company (WAG) and Sealy Corporation (ZZ) are scheduled to issue their quarterly reports.

Wednesday

  • The usual weekly report on U.S. petroleum supplies will be released. Scheduled to report earnings are Actuant Corp. (ATU), American Greetings Corp. (AM), and Family Dollar Stores Inc. (FDO).

Thursday

  • The report on new jobless claims will be released along with the latest look at second-quarter gross domestic product. Later in the morning, we’ll get a read on manufacturing activity in the Midwest when the Chicago purchasing managers’ index is released. Accenture Plc (ACN) and McCormick & Company, Inc. (MKC) will report earnings.

Friday

  • The Commerce Department will report on August construction spending, personal income and spending, and September auto sales, while the University of Michigan will give us a final look at consumer sentiment in September. The Institute for Supply Management will release its September manufacturing index. There are no earnings reports scheduled for Friday.

New Trade Idea:

Buy JA Solar (JASO) October 8 Calls @ $0.65 or Better:

JASO Sept 26 2010

Solar stocks are participating in this rally and JASO is breaking out with nice volume.  Use $1.00 as a target and $0.40 as a mental stop-loss.

Buy Visa (V) October 72.5 Calls @ $1.75 or Better:

V Sept 26 2010

Visa has broken above its 50-day MA and out of its descending wedge, a combination which is very bullish.  Use $3.00 as a target and $0.95 as a mental stop–loss.

Open Positions:

Macys (M) October 22 Put @ $0.85:

This play has been closed.

Research in Motion (RIMM) October 47.5 Put @ $1.95:

Continue to hold.  Use $3.50 as a target and $1.00 as a mental stop loss.

TEN Exclusive: Options Update – 9/26/10 is an article from:
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