10:00pm (EST) The big news after the bell has been Microsoft (MSFT, $25.56, up $0.76).  The company reported earnings after the market closed and missed Wall Street’s expectations after saying quarterly profits fell nearly 30% because of weak computer sales. Revenue for the quarter also took a hit, falling 17%.  The numbers…$3 billion, $0.34 a share versus last year’s quarter of $4.3 billion, $0.46 a share.  Needless to say, the unexpected wasn’t expected and shares were down $1.75 in after-hours trading. We had a monster rally today as the Dow finished at 9069, up 188, or 2%, for the day.  The Nasdaq closed at 1973 on a 47 point pop while the S&P 500 closed at 976.  Looks like our crystal ball was right on point.  In the Weekly Wrap on Sunday night, I had this to say: “With the Dow at 8,734 and the S&P 500 at 940, I’d say the bulls are going to do something special or we will fall back into a trading range once again.  That wouldn’t be so bad but it would set-up a bigger stage for a more explosive move either up or down. However, given the momentum, it appears the bulls are in firm control and willing to push us to new highs.  Dow 9,000?  S&P 1000?  Nasdaq 2,000?  Those are the targets on the scope and we have enough meaningful earnings this week to make a run at those levels.” (END) The Dow was the first to arrive and if Microsoft would have beat earnings we would certainly be looking at a higher market on Friday.  However, because of the miss, it could hurt the Tech sector.  As I get ready to post this, the Dow futures are down 30 while the Nasdaq futures are off by 9.  Microsoft is a member of both indexes so if there is no rebound in the shares it will weigh things down a little. With the weekend coming up, it is also time to start taking a little off the table with the huge gains we have gotten from IBM (IBM, $117.06, up $1.49).  We still have another full week of earnings and I don’t think the bulls retreat from here but we have to protect our gains.  The IBM August 105 calls (IBMHA, $12.42, up $1.72) have a stop of $10.00-$10.50.  Sell a quarter if they dip below $12 on Friday and another quarter if $10.50 is broken.  The entry price was $3.40 and IBM could have trouble with the $118-$120 level.  If so, we will slowly back out of the trade taking our 250% profits along the way. As for the IBM August 115 calls (IBMHC, $3.70, up $0.85), our stops are set at $2.00-$2.25.  Raise it to $3 and sell a quarter if we hit this level and another quarter if we hit $2.25.   We got into this trade at $1.05. There’s lots of news out tonight but I’m heading out to enjoy the last couple hours of my birthday.  See ya’ in the morning…hopefully before 9am but I may be a little late if I swing the bat.  Rick@MomentumOptionsTrading.com]]>