Wang's Happy Trading

Thanks Big Blue! This morning, IBM announced surprisingly good “preliminary” 4Q results. The news prompted buyers to rush back in and the sellers to start covering their shorts. This weekend, in my Market Forecast, I said,

“For the new week, earnings are starting. The market really needs some positive catalysts to draw the buyers back in; whether it comes from earnings, the Fed, or something else.”

Well, this is a good start! IBM definitely helped to change the sentiment to some degree, as the market closed higher than it opened! The Dow closed higher by +171.85 points; SPX added +15.23 points; and the Nasdaq jumped +38.36 points.

Let’s see how the market looked at the close:

INX2 (Internet) and SWH (software) both gained +2%. SOX (semiconductors) hopped +3%. GLD (gold) reached a new all-time high as gold closed above $900 and topped $910 intraday! GDX also continued to climb higher. XME (metals and mining) saw money rotating back in and garnered +3.45%. HGX (housing) was up +2.41%, while XLF (financials) advanced +1.38%. MOO (agriculture) flew up almost +4%.

SPX

SPX added +15.23 points to close at 1416.25, above the 1410 support level. Its MACD is looking to turn up. SPX has been testing this 1410 level for the past week. Getting above and away from this level should make this support stronger and stronger. The next resistance level is 1440. Rising above 1440 would really help strengthen the sentiment on the market.

Nasdaq

Nasdaq jumped +38.36 points to close at 2478.30. It closed above the 2450 support level, but, is still below its November low, 2550. Rising above 2550 would make the picture more bullish. Its MACD is looking to turn up!

I find the stock market amazing, awe-inspiring, fun, and “funny”! Why is it “funny”? Why did IBM wait until this week, which is the options expiration week, to make preliminary earnings announcement? Was its CFO cranking up the numbers this weekend, and, suddenly realized, “Hey, we’re doing pretty darn good!” Or, was it just “coincidentally” the perfect timing? The market had a hard time finding any solid footing last week. As the market slid, it drew in more shorts. A lot of puts (options) were sold/bought. If the market continues to rally this week, a lot of those puts are going to expire worthless. On the other hand, the calls could now be picked up at a much lower price and could potentially be very profittable. Are the big boys (fund managers) playing “kill the puts” this week? I guess we shall see. We have some pretty big, potential catalysts this week, including tomorrow’s earnings from Citigroup (C), PPI data, and AAPL at the MacWorld.

As mentioned before, IBM delivered some very encouraging news today. Its shares were up +5.26% at $102.93. SAP also echoed an upbeat sentiment on its business. Its shares traded higher by +4.21%. VCLK was upgraded to “outperform” today, as the FTC probe is expected to end soon. Its shares jumped +12.70%! The agriculture sector was enriched and “well-fertilized” today! As mentioned earlier, MOO advanced nearly +4%. MOS made a new all-time high at $110.2, closing up +10.41%; and POT closed above $150, advancing $11.37, or +8.19%!

Good night and HappyTrading! ™