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Will This Rally Stick?


S&P may be poised for further uptick.

Over half the S&P 500 has now reported earnings, and it seems the market has shifted its focus to what Washington will do with regard to a stimulus package.

Early morning trading was dominated by the banks. Poor earnings from PNC Financial (PNC) led the regional banks lower. JPMorgan (JPM), Wells Fargo (WFC) and Bank of America (BAC) didn't help the sector: All made greater than 5% downside moves before recovering late in the day and closing off the lows. Professor Bennet Seddaca buzzed his thoughts on the regional banks earlier today:

"As I sit here and watch CDOs being downgraded by the thousands, many large regional banks (Regions Financial (RF), Fifth Third (FITB), Huntington Bancshares (HBAN), SunTrust (STI), Marshall & Ilsley (MI), among many others) act like the world is about to end. And the unemployment picture. And the debt picture.

"I see futures bidders show back up. Yep, at critical levels. Without regard to price.

I sense 'the Hand' is back."

The hand Bennet is referring to is the curious contra-hour bid in the market. Yes, the late-day rally caught many traders by surprise. The bigger question is: Will this rally stick?
Professor Cooper also weighed in with his thoughts:

"From where I sit, other than the pattern and the cycles, I believe a positive tell that points to a better than average likelihood of a multi-week rally.

"Is the change in character evidenced by names like Myriad Genetics (MYGN) grinding higher on earnings this morning. Would that have happened last fall? Ditto Amazon (AMZN). There may not be a big appetite for risk, but the taste buds are aroused.

"I continue to think that a breakout this week back above 836 (on a close) and particularly trade above 853 (near the 20 DMA which is declining) is destined to succeed for a multi-week rally."

If you follow Cooper's methods, the S&P may be poised for a rally phase after closing today at 838.

Tomorrow before the bell, we have some large companies reporting earnings, namely Clorox (CLX), Phillip Morris (PM), Kraft (KFT) and Ralph Lauren (RL). Check out Jeff Macke's trade in RL today for more.

After the bell tomorrow, Cisco (CSCO) and Visa (V) report earnings. I would pay close attention to what Visa has to say with regards to the consumer. The Street currently has EPS at $0.66 on revenues of $1.65 billion.

Have a good night, Minyans!
Position in SSO

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