April 14, 2010

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Market Analysis From A Trader As Earnings Take Center Stage

April 13, 2010

The markets gapped slightly lower on the day as the earnings report from Alcoa Inc. (NYSE:AA) lagged expectations. While earnings were in line with what analysts had expected, revenue did come in light. With pricing increases over the quarter, this brings to mind weakness in demand as the culprit. This worried Wall Street and Alcoa Inc. is lower on the day by 2.06%.

All eyes now shift to Intel Corporation (NASDAQ:INTC) which reports after the close. Earnings expectations are for $0.38 per share while the whisper number is for $0.41. Intel Corp. has moved dramatically higher over the last few months and will need a stellar report to boost the stock price further. Margins as well as revenue numbers are going to be watched closely.

As a technical trader, the top play of the day was the hit of the 200ma, on the intra day 10 minute chart, on the SPDR S&P 500 ETF (NYSE:SPY). I gave this to my members as an optimal long play. Sure enough, the bounce came in beautifully. Profits were had by all. What is encouraging about today is the slight increase in volume. Yesterday, the SPY barely did 100 million in volume. Today, with the earnings news from Alcoa, we should push through that level easily. In addition, each day going forward, should see more volume as options expiration, earnings and economic news increase. Swing trading and day trading should be fantastic.

Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com