Stock Market
All comments and Stock Market Ananlysis are made by Guy Brumley. Guy has been trading the Stock Market daily since 1992.
Trading, evaluating stock prices and predictions
Stock Market Commentary 7-20-2009
Options expired on Friday with another 32 points up. 25 points of the gain came from IBM. IBM had impressive earnings, and raised their guidance for the fiscal year. The earnings estimate for IBM now sits at $9.70, which is higher than last years total. This is the strength of earnings growth we need, for the market to return to new highs.
I still am sitting out this rally until I see more earnings. The next couple weeks will give a more complete picture of the economic cycle. Until then, the next level of resistance for the DOW is the June high at 8940. The trend line resistance for the DOW is at 9150.
The new high list is getting pricey.
STEC was $3.40 in January, and hit $32.50 Friday. Here is a company trading at a market cap of $1.6 billion, and is on pace to make $12 million this year. Only 133 years of profit to buy the company. There is room for growth but you are chasing this.
The market has advanced for one week, after declining the previous four. I think we will get a pull back early next week, and then more sideways action through October.
Look to the foreign ETF’s to lead the market. EZW for Brazil; EWH and FXI for China.
Read the Rio Tinto story of bribery at the Chinese steel mills.
Return to Previous Market Commentaries