New Market High Next Week. As Earnings Are Posted the Buying Pressure Will Build

Posted 10:30 AM ET - If you made money this week by following my comments, please CLICK HERE and post a review on Investimonials. My goal is to have 200 five-star reviews. We are within striking distance your comments inspire me to keep blogging. This has been a good week for the market. The news got "heavy" and buyers pulled their bids on Monday. We saw a small wave of selling and bullish speculators were flushed out. That dip only lasted a day and stocks snapped right back. This demonstrates a strong bid. Europe posted a better-than-expected IP number early in the week and that bodes well for the flash PMI's next Thursday. The EU could be the key to the next leg of this rally. The market will be closed Monday, but China will post GDP, industrial production and retail sales. Some analysts are questioning China's growth and the numbers should be in line. All will be fine as long as the miss is not too dramatic. Earnings season kicked off and financials have been strong. American Express posted results yesterday and consumer spending increased 8%. Earlier in the week I mentioned that dismal results for retailers had more to do with over-saturation than it did with a decline in consumer spending. Financials will lead this rally. The spread between the borrowing and lending rate is expanding and banks will do well. Intel missed earnings by a penny, but this tech bellwether is not what it used to be. It was slow to shift to mobile and over time, it could regain its status. For 2014, they project flat revenues. There was a silver lining; the PC slump seems to have bottomed out. As earnings season unfolds, the buying pressure will build. Revenues will be flat, but cash flows will hit record levels. Stock buybacks will continue. The action will heat up next week. Stay long and focus on breakouts. Monday is a legal holiday and the action could be slow today. The market was able to overcome light selling yesterday and early today. Support has been established and we should see a slightly positive bias the rest of the day. This is option expiration so the action could be a little choppy. I am expecting a new market high next week and we should trade above SPY $185. Once the rally starts getting traction, the momentum will build.

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