Mid-Week Update

Intel reported good earnings.(1) It looks like their March 3 warning was premature. JP Morgan, Coca Cola, Wells Fargo, and Abbott Labs reported before the bell today and IBM, EBAY, ALTR, and GILD report after the bell. JP Morgan's profit fell by 50%, but that didn't stop the stock from going up 5%.(2)

Although finances have been decoupled from tech in the past, it's good to see a rally in financials because it may indicate that the worst is over and things may be getting back to normal, or what will pass for normal in 2008. Everyone seems to be getting comfortable with the notion that the first part of the year will be slow and the second part will pick up. Just as you want to sell when your taxi driver starts giving you stock tips, you want to buy when news anchors admit that we are in a recession. No one wanted to admit it, but the recession started in August, and most likely will end in September of this year, with stocks reaching or exceeding their highs in December. According to Bob Doll, BlackRock's global equity CIO, "The current earnings recession of negative year-over-year comparisons will last four quarters. Q2 2008 will be the fourth."(3) He has 9 other reasons why BlackRock likes U.S. equities. So now is the best time to buy if you are an investor, or a short-term, 8-month holder who wants to buy some stocks and take a long vacation.

As of about 12:30, most indicies have blown past resistance by now, according to Brian Shannon's Alphatrends.net analysis from yesterday.(4) The Qs (QQQQ) are at 45.25, past the 43.50 level of resistance. He called 45.50 as a key level to maintain. The Russel 2000 Index (IWM) is at 70.71. He said it would be a buy above 70.50. The S&P Depository Receipts (SPY) is at 135.47. 135 is the VWAP and 50 DMA. If it breaks 136, this could signify a right shoulder. The Financial select spider (XLF) is at 25.33. 24.40 is support. 25 was resistance. If this holds, perhaps we can see a breakthrough 26.20 to test the 50 DMA and down trend. Let's see if these levels can hold through the close.

Sources:
1. Seeking Alpha Intel Q1 2008 Earnings Call Transcript
2. Bank results soothe investors
3. Ten reasons to like U.S. equities: BlackRock
4. Trading & Investing Video Technical Analysis 4/15/08