GRANDPA JOE: But this roof is made of glass. It’ll shatter into a thousand pieces. We’ll be cut to ribbons!
WILLY WONKA: Probably.
Is today going to be the day? After pressing against our breakout levels all week, today we should finally have the gas to get over the top. We didn’t have a stick save yesterday and the Dow fell, but not very much and the Nasdaq made its 11th consecutive positive move in a row, something it hasn’t done since 1996. The conditions are right, the hits just keep on coming in earnings with another 200+ earnings beats logged this week against 32 misses (those we easy to count). More importantly, 20 companies have been so bold as to raise guidance while only 12 have been worried enough to lower them.
So we have optimists outweighing pessimists by almost 2:1 in the only poll that matters – the outlook that is filed with the SEC! We also have the FACT that 85% of the companies reprorting this week have done as good or better than analysts expected and we have some signs that the economy may be improving. I said earlier in the week that it was going to be 8,900 or bust for the Dow and we’re toying with that line but it’s really 6,232 on the broader NYSE that MUST be broken and held for this great glass elevator of a market to get through those upside resistance levels and prove these moves are for real. That did not stop us from adding some QID covers into yesterday’s close because, as Willy Wonka said to Grandpa Joe – it probably won’t happen!
Willy Wonka had the physics right, there had to be enough power to get through that overhead resistance or it was going to be a very painful test of the top (like the one we had in June). Since our last dip, we’ve come back for another try and the volume has been up 35% on the average day on this leg. Is that going to give us enough “thrust” to break through this time? As it was in June, all of our inexes are making their targets EXCEPT the NYSE so we do not really care what any of the indexes do this week EXCEPT the NYSE, which must break through it’s magic number (40% off the highs). We have3 other global holdouts: The Nikkei needs to take…
