The bulls needed some positive news ahead of the market open this morning as futures were trading lower throughout the night. The chart work we did from the weekend showed the bulls had some breathing room to work with if there was a lower open but we discussed the importance of the market finishing higher today.
Dow futures were below 16,000 but turned around following better-than-expected earnings from Citigroup (C, $47.62, up $1.94) and higher-than expected Retail Sales which climbed to 1.1% in March.
We talked about the Financial stocks stalling at resistance and it remains to be seen if support holds or if they bounce from here. Citigroup’s numbers were a surprise to Wall Street as the company reported a profit of $1.30 a share on revenue of $20.1 billion versus expectations for $1.14 a share on revenue of $19.4 billion.
Citigroup shares are up nearly 4% on the beat as the short sellers are covering. Shares were a little over a buck away from the 52-week low of $44.52 coming into the report with some traders expecting a miss.
The Citigroup April 47.50 calls (C140419C00047500, $0.55, up $0.23) would have been a nice lottery trade ahead of Friday’s close. The options have doubled on the news and have traded as high as 70 cents.
There are a number of other earnings trades we have listed for the week and there are a few we like. With our current trades showing strong gains, we can afford to be a little aggressive.
As we make the turn, the Dow is up 150 points to 16,177 while the S&P 500 is gaining 17 points to 1,832. The Nasdaq is higher by 41 points to 4,041 and the Russell 2000 is advancing 11 points to 1,122.
Subscribers, check the Members Area for the updates and stay close to your email inboxes as we could have New Trades coming for both our Daily and Weekly Wrap ahead of the close.