Option Investor
Market Updates

It isn't over yet!

Printer friendly version

Last night it was Dow component "Big Blue" and earnings from a technology bellwether that fueled markets higher today, and tonight it will be "Mr. Softee" as software giant Microsoft (NASDAQ:MSFT) $50.93 +1.11% is called that announces earnings and most likely dictates tomorrow's action.

In the last hour, trading has been brisk and rather volatile for Microsoft (MSFT) with a quick dip from $51.75 to $51.15 has traders position themselves ahead of tonight's earnings. While some bulls may look to rid their accounts of overnight risk from stock bought lower, there are also some bears willing to speculate on disappointment and a move lower. Analysts are looking for Microsoft to report earnings of between $0.43 and $0.42 per shares as polled by Multex and Thomson First Call respectively.

This one's about as tough a call as any in the market right now as the supply/demand chart suddenly turns bullish after looking horrific just sessions ago. If looking for a narrow limb to climb out on, I'd have to crawl out on the bullish limb and then look for a bullish charge and unleashing of massive short coving above the $54.00 level. Yesterday's trade at $52 has MSFT's point and figure chart giving a "buy signal" and edging above its bearish resistance trend, with a bullish vertical count now building to $79.

As we near the close, the major market averages have the Dow Industrials (INDU) 8,237 +2.5% ready to peg a close right at their 50-day SMA of 8,276, while the S&P 500 Index (SPX.X) 876 +1.94% also looks to close right near its 50-day SMA of 877. Even the broader NASDAQ Composite (COMPX) 1,270 +3% edges off its highs to seeming try and peg a close at its 50-day SMA of 1,268. If you get the feeling from observation that the MARKETS are waiting for something to cast a deciding vote, then we're in agreement on things.

On a broader scale, today's volume is brisk at both the NYSE and NASDAQ with both markets trading right near the 1.5 billion mark.

One note I do want to make, which has me further leaning toward the BULLISH camp, is that according to Dorsey/Wright and Associates, their NYSE Composite Bullish % (BYNYSE) reversed back higher on an intra-day basis and now has the NYSE Composite ($NYA.X) 471.30 +1.95% back in a bull market phase. While it would not be out of the norm to see a bit of a pullback in the more institutionally held market index, the internals are improving from a low level. After tonight's close, we'll get a look at www.stockcharts.com NYSE Bullish % ($BPNYA) which was at the 29.84% level and as mentioned before, has found suspicious reversals from these levels in recent months.

If you pushed me onto one side of the fence, then put on my horns as I'll go with the bullish % charts which have been reversing up to more bullish phases in recent sessions.

Jeff Bailey

Intraday Update Archives