Earnings Season Begins Tomorrow
The market backed off a bit on Friday, but it was still a great week. Volume levels were elevated as buyers rushed back into the market following a dreadful start to October.
On Monday and Tuesday, the indices collapsed, and it looked like the world was ending. But by late Tuesday, the indices had stabilized. And for the remainder of the week, the bulls jacked the indices higher.
Many stocks look to have bottomed last week. Although a lot of work still needs to be done in order to confirm those bottom patterns, the setups continue to develop well.
As many of you know, TradeMaster portfolio filled up on long positions early in the week. While I decided to take 9% and 13% off the table quickly, it carries four other open positions that currently sit with double digit returns in less than a week.
For more information on the TradeMaster Daily Stock Alerts trading service, which continues to beat the market nearly every month, please click here.
The plan for those four open trades remains the same this week. The market is still prone to a turn lower. While I remain bullish, until SPX can take back 1175, the bears can easily bring the indices back to the lows of last week. But I am not ready to sell our open positions outright. Instead, keep stop losses tight and let the winners ride.
At this time, I don't have any intention of shorting. While a little bearish exposure often makes sense to have at resistance zones, I think the bulls will take them out, which will reduce pressure to sell in the market.
And it's likely that tomorrow will hold the keys to the bulls success. Tomorrow is easily the most important day of a low key week.
On Tuesday the Federal Open Market Committee minutes from last month will be released and third quarter earnings season officially begins with Alcoa (NYSE: AA). Since Alcoa is a large provider of aluminum, a material included in everything from housing panels to drink cans, it is a great proxy for economic activity.
After Tuesday, the economic news is sparse. But retail sales will come out later in the week. On the earnings front, third quarter reports will pick up next week. But JPMorgan (NYSE: JPM) and my favorite company, Google (Nasdaq: GOOG), report later this week. Investor focus will be dramatically shifted to banks this earnings season.
So JPMorgan could send a few ripples through the market this week. Conversely, a positive report from the financial juggernaut could easily take SPX back above 1197, which sets the index up for another run at the formidable 1250 resistance area.
And here's a quick sneak peak at the resistance and support levels TradeMaster trader are following this week.
