Another good day for the bulls with the market continuing to march upwards. I don't know about you readers, but I was expecting more volatility today, it being the FED day and all the suspense concerning QE2. I was long heading into today (still am) and a part of me was concerned about there being a "sell on news" scenario even if the bulls got good news regarding QE2 from the FED. Well, the bulls got to hear what they were hoping for and the market inched upwards. As far as the S&P is concerned, 1174 is the next resistance level.
The bulls are completely in control of the markets here and like I said in the weekend post, I see no reason to be short here, at least technically, and I still stand by that but do keep in mind that it is the earnings season and the big guns start reporting today onwards with Intel reporting after hours. Any surprises and all the technicals get thrown out of the window. I know (and hope) that this is stating the obvious but please do see when a particular stock is reporting before getting into it. Also, do remember that what is important is not the news itself but the reaction to the news. It is very common to see a stock beat the street estimates easily and still fall down hard and similarly, a stock can easily rally on "bad" news.
I personally don't like holding any stock through its earnings. I feel that no matter how much one thinks one knows about a stock, holding a stock through its earnings is basically gambling. A bad reaction and one might not even get a chance to get out with a small loss. If you are great at studying the fundamentals of the company and the particular industry, you will be justified the argue the validity of this point here but again keep in mind, that a stock can fall down hard even on an earnings beat. If you are like me, you will just enjoy the action from the sidelines!
Take care and good luck! I will be back later with the Chart of the Day.