9:00am (EST)
The market ended flat on Tuesday despite a strong run by the bulls to resistance as Wall Street gets set for today’s all-world news event. We went into Tuesday’s update slightly “surprised” the indexes were up over 1% considering the start of the FOMC’s two day meeting but hopes for action from the Fed outweighed the negative headlines from across the pond.
Tech looked strong and was leading the way higher but also lead the way lower at the bears took 2-out-of-3 to win the session. Still, all signs are pointing towards a breakout but we have been down this road before.
The Dow gained over 7 points to finish at 11,408 after testing a high of 11,550. This was right between the 11,500-11,600 area we have been mentioning so it was no surprise to see trouble at the top ahead of the Fed.
The S&P 500 gave up 2 points to close at 1,202 and was able to hold the 1,200 level after reaching a peak of 1,220. We have been targeting a break above 1,225 for the next leg up while a drop below 1,175 would favor the bears.
The Nasdaq dropped a double-duece (22 points) to settle at 2,590 and below the 2,600 mark. Tech touched a high of 2,643 but fell nearly 1%, proving that the volatility theme is still alive.
We expect much of the same for the reminder of the week although we doubt either side will be making big bets ahead of today’s FOMC comments.
In earnings news, Oracle (ORCL, $28.35, down $0.67) beat Wall Street’s forecast after reporting a profit of $0.48 a share on revenue of $8.37 billion for the quarter. The suit-and-ties were looking $0.46 a share on sales of $8.35 billion.
Following yesterday’s 2% slide, shares were back over $29 in after-hours last night and are pushing $30 ahead of the bell.
We have a number of trades that are showing some solid gains and we want to protect our profits. With Wall Street counting on Bernanke doing the “Twist”, there could be a big pullback if he falls flat and does nothing. Due to the volatility we could see today, we have set a few HARD STOPS on some of our profits that will automatically lock in profits should the market retreat.
Futures are pointing towards a slow start this morning. Dow futures are up 6 points while the S&P futures are higher by a point. Nasdaq futures are up a half-point.
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