After 3 days of selling pressure, the bulls have battled back following comments by Fed Chairman Ben Bernanke who said the Fed and the central bank are ready to provide more accommodative measures to keep the economy afloat and headed in the right direction. He is talking to the boys on the Hills and still is in an upbeat Q&A session.
Big Ben said the Fed stands ready to either tighten or ease monetary policy, depending on what is needed to keep the economy on track. The bulls needed this reassurance and with the possibility of QE3 on the table, the market took off and is right at prior resistance levels.
Economic news has light with Export Prices for June coming in flat. Import prices slipped 0.1% from the prior month.
We mentioned volatility would be picking up and with every country’s debt on credit watch we expect this theme to continue throughout the summer. The good news, despite the choppy, rocky headlines is that the charts are reacting just as we thought they would. We said yesterday inside our Members Area yesterday that the downdraft was simply a pullback which formed a bullish flag for most of the indexes. What does this mean?
Well, from the looks of things, a higher market.
If we had to close our eyes before we checked the tape we would say the Dow is near 12,600 while the S&P is battling 1,325-1,334. And while we are at it, we will say the Nasdaq is at 2,825.
Okay, let’s check the tape as we type: Dow (+149) to 12,595; S&P (+16) to 1,329; Nasdaq (+40) to 2,822. (12:35pm, right coast time).
Hmmm, not bad.
The beauty of this market is that the charts are giving us great clues on where we are headed and where we are holding.
Tomorrow is a big day as far as earnings with Google (GOOG, $540.14, up $6.13) and JPMorgan Chase (JPM, $40.11, up $0.72) confessing along with Fairchild Semiconductor (FCS, $16.37, up $0.52) and J B Hunt Transport Services (JBHT, $48.42, up $0.71).
Our trades are showing solid gains as we head into the second half of trading and we may or may not send out a Trade Alert. If we can get confirmation on just a few more things, we may recommend a few quick call options to take advantage of new highs for the market in July.
Subscribers, check the Members Area for the updates but stay locked and loaded.