2:35pm (EST)
Sorry for the late update folks, but, we were watching the charts to see if support was going to hold today and wanted to wait an extra hour or so before sending this out…
The bulls got a double-whammy this morning and had their hopes of any rally off the Intel (INTC, $18.95, down $0.64) news wiped away after a couple of disappointing economic reports whacked the market.
The first one, weekly jobless claims, was another blow to the labor market and showed initial claims for unemployment benefits rose by 12,000 to 500,000 last week. The market had expected a number south of 478,000 and any number below that would have had the bulls on the run. Make that a stampede…
Another blow to the ego came when the Philly Fed manufacturing survey reported a negative 7.7 print for August after a reading of 5.1 last month. Wall Street was expecting the index to rise this month. And finally, the Conference Board reported its index of leading economic indicators rose 0.1% last month after dropping 0.3% in June. The pencil pushers were expecting a gain of 0.2%.
Earnings were a mixed bag once again with some of the Retailers doing better than others.
Gamestop (GME, $19.12, down $1.64) is down 8% after disappointing analysts with its latest quarterly results. The company reported a profit of $40 million, or $0.26 a share, versus $39 million, or $0.26 a share, in the year earlier period. Revenue came in at $1.8 billion matching analyst’s expectations but they missed by a penny and lowered guidance going forward.
The video game industry has not been strong in recent quarters and interest is waning due the lack of big hit, blockbuster games. There have been a few titles out that have done well but you know when Madden ’11 has already been discounted $10 before the football season starts, sales are struggling. Not a good sign for Electronic Arts (ERTS, $15.88, down $0.45) going forward.
There will be a lot of action after the closing bell today as Aeropostale (ARO, $23.46, down $0.03), Dell (DELL, $12.05, down $0.14), Hewlett-Packard (HPQ, $40.56, down $0.80) and Salesforce.com (CRM, $97.09, down $2.24) will be stepping up to the podium to announce their latest results.
The bulls might be a little depressed today but all of the negative news has been good news for our option trades.
As we head to press, the Dow is off a whopping 171 points, or 1.6%, to 10,246. The S&P is off by 20 points, or 1.9%, and is at 1,073. The Nasdaq is getting punished for a 39 point loss, or 1.8%, and is at 2,176.
Both the S&P 500 and Nasdaq should find support at 1,070 and 2,150 which is why we posted today’s update late. The Dow should find support at 10,200.
These levels have not been violated but the S&P 500 has kissed 1,070. If these levels fail to hold, the selling pressure could intensify going into the close and into Friday. We have updated all of our current trades and we can’t wait to get you inside the Members Area today. Subscribers, check for the updates.










