Now that is how you do work. In a shortened four-day trading week, the Dow charged back up above the psychologically important 10,000 level. The Dow gained a full 5% last week, its best weekly performance since last July. The S&P 500 Index (SPX) likewise regained the important 1,040 level.
Despite the bumpy two-week ride down at the end of June, the Dow Jones Industrial Average (DJIA) finished the first full week of July just about where it stood at the end of May, between 10,100 and 10,200, well off the highs of the year, but also seemingly safely above the lows.
With the SPX at 1,077.96 coming into the week, we would like to see a move above resistance at 1090-1095. That will require some work but as you can see we have a slew of economic reports that could help propel us and also option expiration this week, which we feel will be a bullish event for the market. We could see exaggerated volatility and sell-offs could be swift and painful, but the overall short-term trend is now higher.
We are positioned bullishly but expect some turbulence as the markets trek higher.
Weekly Economic Calendar:
Monday
- There are no major economic reports scheduled for Monday. Alcoa Inc. (AA), CSX Corp. (CSX), and Novellus Systems Inc. (NVLS) will kick off the earnings season.
Tuesday
- May’s trade balance and June’s Treasury budget will be released.Fastenal Co. (FAST) , Infosys Technologies Limited (INFY), Intel Corp. (INTC), and Yum! Brands Inc. (YUM) are scheduled to report earnings.
Wednesday
- The market will get the weekly report on U.S. petroleum supplies, as well as June’s retail sales, June’s import/export prices, May’s business inventories, and the minutes from the most recent Federal Open Market Committee meeting. The Progressive Corp. (PGR), Texas Industries Inc (TXI), and Marriott International Inc. (MAR) will post their quarterly results.
Thursday
- A big economic day as Inflationary data, June’s producer price index (PPI) and the core PPI reading will be released. Furthermore, weekly initial jobless claims, July’s Empire State manufacturing index, June’s industrial production/capacity utilization report, and the July Philadelphia Fed’s manufacturing index are all slated for release. JPMorgan Chase & Co. (JPM), Novartis AG (NVS), PPG Industries Inc. (PPG),Advanced Micro Devices Inc. (AMD) , and Google Inc. (GOOG) will report earnings.
Friday
- Friday finishes off the week with June’s consumer price index (CPI), the core CPI, and the University of Michigan’s consumer sentiment index for July. Confessing to earnings will beBank of America Corp. (BAC) , Citigroup Inc. (C), Gannett Co. Inc. (GCI), General Electric Co. (GE) andMattel Inc. (MAT).
New Trade Idea:
Buy Aruba Networks (ARUN) August 15 Calls @ $1.25 or better:
This was a recent winner for us and it looks ready to go even higher this week. We should see new highs shortly. Use $2.50 for a target and $0.65 as a mental stop loss.
Buy Green Mountain Coffee (GMCR) August 28 Calls @ $1.45 or better:
A great looking chart and a solid week of work put in by the stock. It looks poised for a quick move to $28 this week and once there we should see the stock stretch to the $30 area. Use $2.60 as a target and $0.80 as a mental stop loss.
Open Positions:
Cirrus Logic (CRUS) August 17.5 Calls @ $1.50:
CRUS has bounced nicely off of the bottom of the channel and we should see a strong move this week back to the top of the channel. Use $2.35 as a target and $0.70 as a mental stop-loss.
Crocs (CROX) July 10 Calls @1.40:
Continue to hold. The stock looks determined to make a push back above $11 early this week. Let’s continue to use $3.20 for a target and $0.40 as a mental stop-loss.
TEN Exclusive: Options Update – 7/11/10 is an article from: 
