Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Intel Ignites Stock Market Rally

Stock-Markets / Stock Markets 2011 Apr 21, 2011 - 02:28 AM GMT

By: Jack_Steiman

Stock-Markets

Going into the earnings reports last night the focus was clearly on International Business Machines Corp. (IBM), the beast of the big boys. This stock had been on fire and was rocking on all cylinders. No one thought the focus of the evening should be on perennial loser Intel. Always disappointing the street. Always saying things are alright but never wonderful. The stock couldn't get out of its own way lately. So we had a blasting IBM and a disappointing Intel. What happens? IBM is great, but not really great, which means it was time for a small breather in the stock price. On the other hand, Intel pulled some magic out of their hat with a powerful report that included increasing margins, and looked better for the future. The result? Intel exploded, and many of the technology stocks are on a rocket ride after hours. The market is once again doing something no one, including yours truly, would have expected as even remotely possible.


Today we saw the excitement this caused in terms of price, but we still have no breakout in this market. What today accomplished was it put a large gap up in it, which is bullish, but also took the existing handle towards the top and away from near-term break down danger. The market was very close to breaking lower, but this did not happen a few days back. When all was said and done today we have to look into the future a bit at the new earnings reports that come out to see if and when we can make the breakout. It was solid day today thanks entirely to Intel.

It's interesting how many of the reports last night were not received very well. With the stocks I'm about to mention you'd have thought today would have been a down day. Shows you the power of this bull and how rotation continues to be the answer as to why this market rides higher overall. CSX Corp. (CSX), International Business Machines Corp. (IBM), Wells Fargo & Company (WFC), and Intuitive Surgical, Inc. (ISRG) all struggled on their reports. Wynn Resorts Ltd. (WYNN) was great as was Intel. Juniper Networks, Inc. (JNPR) was more or less flat. Some big time leaders sold off, yet the rotation theme carried the day. That's how you know the bull continues onward and upward. Earnings are key, but the market seemed to focus on Intel more than anything else because of how much they have struggled lately and the powerful effect it has on those other companies all over the place that thrive or die on how Intel does.

Business grows in a big way to so many others when Intel is doing well, thus, the perception is that things will be improving all over. Chips are in everything, and so many other big companies are affected positively when their business is rocking. It gives the perception that the economy is doing very well and will continue to only get better because they raised their outlook. Wells Fargo stunk, but financials have stunk up the place for years. IBM just needed a breather. Intuitive Surgical wasn't too bad and doesn't have that branch out affect. CSX Corp wasn't wonderful, however, the CEO said things will only get better. Intel was simply the key to understanding the real economy, and they hit a home run. The market just wasn't that interested in too many others, and thus, the reason for today's strong trading day.

Now let's focus on the financial stocks. They are truly poor stocks. The financials have been a laggard for so long it's hard to remember how far back it goes. I only know it's been a very long time, and that will likely only get worse in time. Certainly nothing is pointing to things getting better anytime soon. It's an absolutely horrible report from Wells Fargo, a leader this morning. The stock was crushed today. The BKX (KBW Bank Index) struggled all day because of that report. If it wasn't for Mr. Bernanke's printing machine, a lot of these banks would not survive.

Think about all that he is doing to keep these banks afloat, yet they still have horrible reports. Now, we all understand on a much deeper level why he's doing what he is doing. If not for the printer this country would be in some very deep trouble. The message from the financials is simply to stay away from financials for now. They may have their moments, but they haven't been able to sustain any real momentum for years. There's nothing to suggest they will any time soon.

The handle, even with today's action, has not been broken to the upside. That only takes place if they take out strong resistance at those gaps and recent highs. 2840 and 1344. The inverse patterns measure up quite a ways if we can get above those levels, but it won't be a simple thing to do for the bulls. It'll take time and further whipsaw action to make the move. There will be nights of good earnings, and of course, nights of bad earnings reports. The bad nights will cause some gap downs while the good ones give us gap ups.

All of it is still just noise until we can cleanly break back above 1344 and 2840. If we clear those levels with some force on a closing basis the bears will be in some very deep trouble. The bottom of the handle is set as well at 2706 Nasdaq. It's still a range of over 100 points which means we can whip around quite a bit. Big exposure doesn't occur until we break away cleanly, so please, just keep that in mind.

Peace,
Jack

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

Sign up for a Free 21-Day Trial to SwingTradeOnline.com!

© 2011 SwingTradeOnline.com

Mr. Steiman's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Steiman's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in