8:30am (EST) The bulls took the ball and ran with it as the market headed higher throughout the week and finished strong on a number of positive developments. Things got rolling on Monday when the Dow popped 113 which was followed up with a 132 point gain on Tuesday. By the close of Friday the Dow added another 78 to finish at 9,864, up 377 points, or 4%, for the week. Alcoa (AA, $14.24, down $0.11) kicked off 3Q earnings season with better-than-expected earnings and actually made a profit as Wall Street was expecting a loss for the quarter. This week we really get things rolling as quite a few of the Financial companies will be reporting. The banks have reported solid back-to-back quarters and we will need to see more of the same or there could be a slight sell-off in the sector. Tech was also hot as the Nasdaq and S&P 500 both gained 4.5% for the week. The Naz finished at 2,139, up 91 points, while the S&P 500 added 46 and settled at 1,071. International Business Machines (IBM, $125.93, up $3.64) finally broke through a heavy wall of resistance and I have been talking about what a huge event this would be. The October 125 calls (IBMJE, $2.90, up $1.75) zoomed 150% on Friday and opened at $1.30. The October 130 calls (IBMJF, $0.84, up $0.57) soared over 200% and opened for three dimes. The stock could make a run to $130 which represents another area of resistance and an ALL-TIME high for the stock. The company reports earnings on Thursday and they have been knocking the cover off the ball all year. Somewhere I can hear the Allman Brother’s singing “you’re my blue sky, you’re my sunny day”… As you know, I have been making the call for Dow 10,000 since early summer and have been the bull’s biggest cheerleader since March when we started going long the market when everybody was still selling. We used longer-term options to see the forest through the trees and we were well rewarded. If the news this week is good, the Dow may well pass 10,000 for the first time in over a year. What? You think it’s a coincidence that IBM, Intel (INTC, $20.17, up $0.29), Cisco Systems (CSCO, $24.03, $0.36) and Apple (AAPL, $190.47, up $1.20) are all approaching 52-week highs… Earnings will be big this week but we will also have some economic reports that we will need to monitor. The Federal Reserve will release their meeting minutes from their September 22-23 gathering and Wall Street likes to look for the devil in the details. The minutes will be out Wednesday and could give us clues about the Fed’s plans for pulling back on its stimulus measures, including near-zero interest rates. The Commerce Department will report Retail Sales for September and Business Inventories for August, on Wednesday as well. Other key reports will be the Consumer Price Index on Thursday and a preliminary reading on Consumer Sentiment will come out on Friday. As we head to press, Dow futures are up 43 to 9,850. Subscribers, check the Members Area this morning for the trade updates.]]>
