Strong earnings lift stocks…

With the height of earnings reporting season at hand, corporate America for the most part has not disappointed. Companies such as McDonald’s (NYSE: MCD), Intel (NasdaqGS: INTC), Harman International Industries (NYSE: HAR) and Google (NasdaqGS: GOOG) all exceeded earnings expectations, just to name a few. The key indexes are indeed benefiting from Q3 reporting season. The Dow Jones Industrial Average (chart) and the S&P 500 (chart) finished the week up over 1 % while the Nasdaq (chart) and Russell 2000 (chart) lagged a bit.

Now all eyes are on Europe and what comes out of this weekend’s summit meeting of the European Union leaders. With how emotional the markets have been recently, especially as it pertains the EU debt crisis, I would expect next week will be yet another week of extreme volatility in the markets. However, one item to note, for the first time since early August the S&P 500 (chart) has broken and closed above the 1230 level. This level has acted as strong resistance over the past couple of months.

This event for certain market technicians is a key breakout, but for me I want to see multiple days of remaining above the 1230 mark and of course I would like to see significant progress made from across the pond before I get more bullish.

Have a great weekend 🙂