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MV Weather Report: S&P Flash Flood Warning


Rain or shine, we review the day's biggest stock stories.

It was slow summer options expiration Friday as stocks languished for the day. Investors were most likely burned out after a rip roaring week that saw the S&P 500 move up from 875 to 940, snapping a four week losing streak and more importantly putting the index right up near the 950 level.

For the day, the S&P 500 closed at 940, down 0.04%, practically unchanged from yesterday's closing prices. Why do we even show up to work on these summer Fridays?

I'll answer my own question, today could actually turn out to be a pivotal turning point for the S&P 500. Today on the Buzz and Banter Professor Jeff Cooper explained why.

"Is this weeks thrust reminiscent of the thrust of the March low?

"Could be a breakout. Could be an exhaustion in which case I would indicate a Spike & Reversal pattern and that the move up has been an option expiration runaway squeeze play rather than the normal wall of worry leg up.

"One of the reasons I think that is possible is that the normal corrections that accompany a normal leg up have been absent. That suggests a Spike & Reversal pattern from what is massive resistance at the opening range of the week for 2009---940 S&P.

"Interestingly, a Square of 9 chart shown yesterday and seen here reveals that 940 is opposite July 14/15th.

In my experience tuning points and square outs seem to be more powerful when the market is magnetized sharply smack into a potential time/price target."

No action in the indices today but we did see a reaction to earnings reports. Google (GOOG) was down -2.79% after posting inline numbers, IBM (IBM) was up 4.32% after exceeding the Street's expectations, after quite possible posting the more difficult to understand reports in history, General Electric (GE) was down 6.05%, Citigroup (C) was down 0.33% and Bank of America (BAC) was down 2.13%.

Earnings season will really kick off next week most of the S&P 500 will report second quarter results. Check out the trading radar for a preview and list of all major companies reporting earnings.

Next week will be longer then this week so rest up over the weekend. Have a great one!
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No positions in stocks mentioned.

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