Retail Sales are Booming…

We are in the final stretch before Christmas. Yes,
the blatant commercialization of a great holiday gets old. But it never
manages to dampen my Christmas spirit.

Online sales are up 12% over last
year. And brick and mortar sales are coming in strong too. SpendingPulse
reports that clothing sales are up 9.8%, jewelry’s up 2.6% and furniture
sales are up 3.4% over last year.

A Trader’s Outlook

Yesterday was an interesting day to say the least.
The major indices gapped higher at the open after Congress and the
president reached a compromise that would allow an extension of tax cuts
and jobless benefits. And while I contend this was the right move, it’s
hard to see it as a major catalyst for stock prices.

Sure enough, stocks sold off steadily most of the
day. And the S&P 500 closed slightly below important
support/resistance at 1,225.

Is This the Dip to Buy?

It’s Veteran’s Day, I’m taking a moment to recognize
the sacrifice and dedication of our military.

The bond markets are closed today, so we’re losing
an important catalyst for the stock market. Without the running gauge for
the U.S. dollar, traders will have to depend on recent news to drive the
action today. And that may not be a good thing…

Cisco (Nasdaq:CSCO) is down huge after its
earnings report last night. The company beat earnings by a couple
pennies, but offered guidance that was well below expectations.

The Most Important Earnings Report is Tonight: How to Profit

After the closing bell, tech giant Cisco (Nasdaq:CSCO) reports earnings
for the latest quarter. And what Cisco says about business spending could
decide the stock market’s direction for the next three months.

Cisco makes Internet routers, which deliver Internet information across
corporate networks. Nearly all of Cisco’s sales come from corporations.
So when corporate spending is growing, Cisco knows it.

Earnings and the Dollar

Earnings season really gets moving this week as we hear from
heavyweights Bank of America (NYSE:
BAC), IBM
(NYSE:IBM)
Apple (Nasdaq:
AAPL), Goldman
(NYSE:GS), Yahoo (Nasdaq:
YHOO), Johnson & Johnson (NYSE:JNJ), Morgan Stanley (NYSE:MS), Wells Fargo
(NYSE:
WFC), and eBay
(Nasdaq:
EBAY).

Citigroup (NYSE:C) reported this morning, and its earnings
news was similar to JP Morgan’s (NYSE:
JPM): both companies beat expectations by a few
pennies a share, but much of the improvement was due to smaller loan loss
reserves, rather than strong improvement in operations.

A Sales Call to the Government

Technology can fix anything: even the Federal government’s
deficit. At least, that’s what the Technology CEO Council told White House
officials yesterday. The council, headed by IBM (NYSE:IBM) CEO Sam Palmisano
said investments in efficiency technology could save the U.S. government $1
trillion over the next 10 years.

Of course, the meeting was basically just a sales call. And
seeing how much loot the government’s been doling out, I wonder what took
them so long.

Can Bank of America Break $14?

I’m still miffed at Fed Chief Ben Bernanke for not speaking
with confidence about the U.S. economy. For a group to succeed, it must have
confidence that it can succeed.

Generals know this. Coaches know this. But for some reason,
Ben Bernanke just can’t bring himself to give the economy a vote of
confidence.

But perhaps he’s competing with the Bank of Japan and
China’s government in the great race to the bottom for currency
valuations.

You Shall Not Pass!

The S&P 500 is at a very interesting spot. On Monday, September 13, it
gapped up and ran above resistance at 1,120. It’s dipped below that level every
day since. But the bulls have rallied and closed the S&P 500 above 1,120
every day.

The S&P 500 is consolidating recent gains above an important
support/resistance point.

This is exactly the kind of action I like to see. And the trading floor guys
and the talking heads on CNBC are all buzzing that this rally might have legs,
these gains might stick.

What Will Obama Say?

Yesterday, buyers mustered the strength to build on
Wednesday’s strong rally. In fact, the bulls pushed the S&P 500 above a
key resistance point at 1,085.

I’ve talked at length about how pessimism was at an extreme
and a bounce for stocks looked likely. Recent economic data has been good
enough to support the notion of an economic recovery, and while not setting
records, it is at least strong enough to avoid a double-dip of
recession.

Most of the recent data was in line with expectations:
factory orders were up 0.1%, productivity was down 1.8% and labor costs were
up 1.1%. However, Wednesday’s strong new home sales for July (up 5.2% when a
loss was expected) was probably the single most important data point.