Wednesday, January 13, 2010

Next Key Point on S&P 500: 1150

As has been the pattern for much of this epic rally from March 2009 we have a new recent high (S&P 1150 - which in this case was formed Monday morning), then a pullback, and now a new advance on that recent high.  Each time this happens we are left with the question of (a) potential double top? or (b) double top breakout?

While there have been some headfakes along the way eventually all paths have led to double top breakout - which are bullish.  (all this means in layman's terms is the market - or a specific stock - tests recent highs and than breaks up and above those recent highs, creating a new high)  So in the near term what I have my eye on is if S&P 1150 is retested, how the market acts.  Until the pattern breaks, we have to assume 1150 will be broken to the upside - not necessarily on the first attempt but "soon enough".  Only when we have abject failure do we assume we might have a potential change of course.

With Intel (INTC) set to report earnings after market close Thursday followed by JPMorgan (JPM) premarket Friday I would assume that if we are not over S&P 1150 by late Thursday, the move will be some sort of gap up or down Friday AM.   Both those stocks look in good shape to take off, so if you are one who believes information tends to "filter out" into the stock price ahead of actual release (i.e. by this time the CFO and CEO and a host of underlings know exactly what both companies will report) - than both these companies should do ok on earnings.  JPM's chart especially took a turn for the better as they closed their books for the quarter.

Not that information ever leaks out on Wall Street to "the right people" ahead of general dissemination - that would be wrong, and surely never happens.

No positions in JPM or INTC

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