What a day...

Well...it looked like a nice and quite day in the market until the final two hours of the day approached. The market opened a bit stronger, then went near unchanged, traded in the negative but finally found its footing and reversed to the upside. The indices gave up some of their gains in the final 20 minutes of the day but the Dow still managed to close + 95.81 or + 1.2 %.


The final 2 hours saw more buying on an increase in volume and all of the major averages took out the highs from last week, hence making new highs for the up move which started March 9th.


JP Morgan's results, released before the opening, were slightly better than expected but failed to really stimulate the market. If anything it made clear that the recent banking rally seems to be, at least temporarily, running into some headwind.


The Nasdaq led the way up with a gain of more than 3 % at one point. (closed + 2.6 %)Undoubtedly the Nasdaq's performance is attributable to Google's earnings release, scheduled for after the market close today.


To guess Google's earnings is a bit like reading tea leaves...so I will not even try. However...I do believe that unless Google completely disappoints tonight the market will work higher and the Dow should reach my primary target of 8250 sooner rather than later.


The other heavyweight scheduled to report earnings is GE tomorrow morning. Between GE and Google tonight we should see quite a bit of volatility tomorrow morning.


Trends are clearly up and participants are more focused on good news (or lack of bad news) and are willing to carry stocks higher even absent any major news.


I believe that 8250 is pretty much a given after today's performance and subsequently my extended target is still 8450 to 8500. A brake below 7850 would alter my view and would indicate short term weakness. If that were to happen downside targets are then the 7500 and 7150 area.


Needless to say...signs are clearly pointing towards higher prices and we should see follow through strength tomorrow, carrying the Dow towards the 7250 level.


Let's keep our fingers crossed for Google tonight and GE tomorrow morning.


See you tomorrow,


Steve Benger

PS: Just glanced at Google's earnings. Exceeded all estimates with the exception of revenues. The market should bid the stock higher tomorrow...if not...the whole tech sector might be in trouble tomorrow.