Stocks Jump Off 875 Level

Monday, July 20, 2009

After a week of relaxing on a small lake in Upstate New York, I return to find earnings coming in ahead of expectations and a strong bounce in the markets. Earlier this month, we highlighted the 875 support level on the S&P 500 and questioned whether it would hold again as earnings season kicked into full gear. Well, not only did the area hold, stocks turned and rallied 7% last week while we were fishing and tasting the best of Finger Lakes' wine (much, much too sweet by the way).

The market's momentum leaders continue to push higher with Apple and Goldman Sachs showing herculean strength. Even some blue boys joined the party with Intel and IBM mounting strong rallies of 8.2% and 14.5%, respectively. The S&P 500 has rallied back to the upper end of the recent trading range at 950.

Will companies continue to impress the Street? We will see, but the pull-in to 875 may have just offered one of the very few opportunities to position long with good risk/reward prices in this continuing rally off the March 9th lows.


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