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Two Ways: All Eyes on JPMorgan


Strengthen your portfolio in good times and bad.

All eyes are on JP Morgan Chase (JPM) tomorrow morning as the bank is set to report second quarter earnings before the opening bell. According to, the bank has big shoes to fill due to the numbers Goldman Sachs (GS) reported earlier in the week. But analysts may be more interested in what JPM has to say as it may provide a better feel for the overall economy due to its heavy exposure to the retail sector.

So, one important area of focus will be the credit card business. JPM reported net charge offs at the end of last quarter to be 7.72% and these figures are expected to increase as unemployment creeps higher. Retail Financial Services will also be at issue because it contains the home lending portfolio. Last quarter JPM increased its provision for credit loss to $3.87 billion.

Consensus estimates call for the bank to earn about $0.04 per share on revenues of $25.8 billion.

From the Bull Pen: If you're in the camp that these bank earnings can juice the S&P 500 above 950 resistance, then consider the SPY. A sell stop can be set below $92.

From the Bear Cave: The financial ETF (XLF) was recently mentioned in the bull pen, but there's significant resistance near $13.00. Bears can test the downside with a tight buy stop, if and when it reaches that level.

Big gulps huh? Well.. see you later! -- Lloyd.
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No positions in stocks mentioned.

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