After the key 1100 support level of the S&P 500 was seriously tested on Tuesday, stocks managed to finish the week up. For the week, the Dow Jones Industrial Average (chart) closed up 1.7%, the Nasdaq (chart) +2.6%, the S&P 500 (chart) +2.1% and the Russell 2000 (chart) gained 1.9%. The markets held on to their weekly gains despite yet another anemic jobs report that was issued on Friday indicating that the unemployment rate here in the U.S. is still at 9.1%.
Next week kicks off Q3 earnings reporting season with earnings coming out of aluminum producer Alcoa (NYSE: AA), tech titan Google (NasdaqGS: GOOG) and JP Morgan Chase (NYSE: JPM), just to name a few. I think this upcoming earnings reporting season will be more significant to the markets than usual. We all know by now the key indices have been trading in a range for quite a while. Over the past couple of months the markets have been highly emotional. This is especially true when economic or European headlines hit the tape. Whether it’s positive news or more often than not negative news, the markets swing wildly before catching its breath. This apparently has kept us stuck in this incessant pattern.
Whatever corporate America reports with their Q3 results, this could be the catalyst that either breaks us out or breaks us down through the key support or resistance levels of this range. For the S&P 500 (chart) that would be the 1225 zone at the top end, and the 1100 zone of the bottom end of the range. Good luck to all.
Have a great weekend 🙂