In my Market Forecast this weekend, I mentioned that the market "may need to rest and trade sideways to start the week." Indeed, the market treaded water on Monday and Tuesday. In our Trading Room yesterday, I said:
October 12, 2009 11:20 AM
rising, but, should find some resistace around 23.5 [then] we'll see what happens...
October 12, 2009 11:55 AM
struggling with 23.5 a bit; if it goes above 23.5, it can test 24, which will actually setup nicely for good earnings to come. Then, there will be room for VIX to fall further. But, this little pop to 23.5 is not bad either, healthy for the market.
Today, VIX tested 24 and came back down, "setting up for good earnings to come". After the market, INTC reported earnings that easily beat the estimates and it raised its 4Q guidance. INTC shares jumped +4.68% to $21.45 in after-hours trading. CSX also reported better-than-expected earnings. Its shares went up +2.64% after the news. Most sectors were flat today. Gold made another record high going above $1065/ounce. Oil rose to near $75/barrel. Home builders saw some bounces: KBH +3.03%, TOL +3.14%, SHW +2.02%, MDC +3.8%.
INTC earnings sparked some solid buying in the evening trading, especially in the techs, led by the semiconductors. Both SPX and Nasdaq camped out just below the recent resistance levels for the past 2 days. Their daily upper BBs have opened up, hinting for more upwards movements. With INTC's superb earnings, the market may have the boost that it needs to take off. Tomorrow, we'll hear earnings report from JPM. JPM has been range-bound for the past few days. We'll have to see how the market reacts in the morning. If the finacials join in on the rally, we should see SPX head towards 1100.
Good night and HappyTrading! ™