Market Update 13 April 2009 BMO
I will be expecting either a spectacular break above 8,000 today which would result in some major upside for the rest of April … or a similarly spectacular break down to 7,500. Granted that tomorrow is a Public Holiday and the start of a Three-Day Weekend, I am leaning on the former rather than the latter and will stick to my previous analysis of an extremely bullish April.
Well, it wasn’t really as spectacular as I had hoped for but it did break above my (11 year historical) 8,044 and held well above it. And now we go into the traditionally bullish 3rd week (expiration week) of April. Historically the week after the long April Good Friday weekend tends to be very bullish.
This coming week, I’m expecting a big rally on higher volatility. Volatility fell last week on better than expected fears but with earning season in full swing this coming week, expect a hike in V-levels.
On the cards this week are three big financial players; C, GS and JPM. On the back of last week’s positive numbers from WFC and MS’s better-than-feared returns, Financials are expected to lead next week’s rally along with better-than-expected numbers from the Construction data due out on Thu and PPI and CPI numbers on Tue and Wed respectively.
- Tue, Apr 14 - PPI, Core PPI, Retail Sales (all 08:30 BMO)
- Wed, Apr 15 - CPI, Core CPI, Empire Manufacturing (08:30 BMO), Capacity Utilization & Ind Production (9:15) and the Fed Beige Book (14:00)
- Thu, Apr 16 - Building Permits and Housing Starts (08:30 BMO), Philly Fed (10:00)
Also on earnings watch are GE, INTC, GOOG, JNJ and a host of transportation market movers like, CSX, JBHT, LSTR, LUV, WERN and OSK.
Next up, 8,185 and 8,270. Not impossible if you consider another 200 point day like Thursday. After that, its clear blue April skies all the way up to 9,000 or the 200DSMA, whichever comes first … if it comes before May. And above that, we can dream of 9,500. And that is about as good as it gets for the rest of the year – a range between a low of 6,000/6,500 and a high of 9,000/9,500.
Watch out for mid-day gyrations as Fed members will be making appearances on the 14th (Evans and Stern), 16th (Lockhart and Yellen) and 17th (Hoenig and Bernanke).
I am looking forward to more upside and will be taking the ride for as long as it lasts. I’ll be staying away from Swings and will probably stick to day trades and scalps.
Stay safe, sane and sober and happy hunting always!
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