Monday, July 20, 2009

Which Way This Week? Sell it, or Off to the Races!

Seems as though we have significant resistance at the $950 Level on the S&P 500, this last week we've gone well up over 7% and there could very well be the possibility that the market was bought up to sell all of the Earnings News coming this week.

From my speculation, if we get some good earnings reports from a lot of major S&P 500 companies, then all the buying that was done in the previous week will not have been in vain and we could push through the $950 level! It seems as though this recession was priced in by knocking down great companies stock prices, and noone wanted to miss the bull run so a lot of institutional money came into the market never to look back at the $700 level on the S&P's. This week has already been positive with the Dow Jones currently up +100 points. You have to ask yourself one question, why would all of these companies have been bought up with rigorous buying if there was no catalyst to spark all of the buying. Was it the supposible, "Fakeout to Sell the News" or was it legitimate buying interest buy Institutions that are placing their money into companies that they believe to have better than expected prospects to beat the street earnings and get this market into gear, because there may be signs that the Economy is ticking up in sales across a vast array of different companies?

I'm very weary of Apple (AAPL) into earnings. The stock has gone from $135 to $155 per share in a matter of 1 month! Resistance lies at the $155 level and I'm almost thinking that there may be a large amount of selling after the news to take some of the well Earned Profits that have come from buying into the stock since mid-June. The largest Open Interest for Apple is in the August contract in the $130 Put options and then the $150 Call options, 19,000 & 23,300 contracts respectively. This may be indicative that people are buying protection for their stock in the form of Put Options in case we do get a sell off in the stock after earnings are released and the numbers don't blow out the estimate Wall Street has bestowed upon them, somewhere in the ballpark of 5 million iphones are expected to have been sold, and I have heard from various news sources rumors that Apple will blowout the Mac sales forecasts, so we will see.