Honestly, I am not sure why so many people were surprised by Intel and JP Morgan’s earnings. Chip makers typically do better when college students go back to school. Schools may need new software and students usually buy new notebooks before returning in late August and early September. Also, JP Morgan has been getting the nod from the government ever since Bear Sterns and Lehman got shown the door. They have been given the savior title from Washington and said they were on the road to an outstanding finish. Retail sales were down -1.5% today because of the end of cash for clunkers. The automobile industry put a small dent in the retail number.

Many eyes will be on RIMMs earnings and new home sales over the next few days. The question is can earnings and positive housing numbers really stimulate the stock market? Small resistance to 1100 but after that a clear road to 1200. The only problem is the market rose to fast and a normal pull back may be in order; 3-5% has been the norm in previous instances. We need a strong bullish or bearish market to day trade!

Could the S&P climb to 1100? I think it could get close but may have to pull back. I know many traders that are just sitting and watching this bull rally. Some are calling it a bs rally but it is still moving upward. The fact is industrials, retail sales, and unemployment numbers are getting better. The problem is a recession or almost depression that we experienced takes time to heal. The S&P almost doubling in a year or so does not make me confident; especially when the consumer is still on the fence. Remember a young person typically invests in the markets for the long haul, while older individuals should be in less risky products. Is there even a less risky product out there? Unfortunately, everything is a risk and you should consult a professional when making all decisions.

The technical level we have discussed in the past has been reached; 1056 which does signal confidence and a bullish market. Many times when a target is reached a pull back is in order but this market is different than in the past. The S&P is taking out technical levels and moving higher; much quicker. We are in a V shaped recovery period and may gain steam due to retail investors jumping in. I mentioned this is my daily commentary. The consumer may have been forced to jump in the market because savings rates are very low. People need to reach goals and can’t do this at 1% or less.

The data that has been dripping in over the past few days doesn’t really show strength; although news today showed the recession may end quick with growth probable. Retail sales many times does grow before school starts and around the holidays. Should this news have made us go long today? I don’t think so.  Individual stocks like Target, Kohl’s, Costco, or Wal-Mart had a nice pick me up today on the retail news. Banks may still be in trouble, the deficit is high, foreclosure are growing, and the unemployment rate although better is still in the red. Too many moving parts for the market to go straight up. The market still may be 40-50 points over bought so we have to be smart here.

We are seeing that banks closures will continue to be problematic. From the second quarter of 2009 it has been reported that troubled banks rose from 305 to 416 in the second quarter. Secondly, I have said this before and it may start to be a reality. The consumer is not spending as much and it is affecting major retailers.  If people are over leveraged as is and are nervous we could see hundreds of retailers fold. What does this mean? It means that mini corrections may occur and this could happen for months or even years. No outstanding news or economic data has been announced that demands the market’s bullish behavior.

If one bases trading on the mindset of consumers the market will continue to do a head fake. Consumers are scared and will take a long time to come out of hiding. Employment numbers are still rising like I have mentioned for months and will reach 10%. This means more foreclosures and more families that will need government assistance. A slow rise on the S&P and the dollar is what our country needs! The S&P has a range of 982-1017 creating a gap of uncertainty and steady movements. Are we going to see a bigger correction? There is a possibility that a 15%-20% correction could take place. A second wave of lay-offs, foreclosures, bank closings, and market consolidation may occur; like a mini relapse.

Could this be it? Could this be the end of the recession? Is it okay to jump back in? First off, it is never safe to jump in but we know that we must play the game to win. I am fearful of stagflation over the next 5 years and possible inflation hitting us like Mike Tyson in his early years as heavyweight champ. A long term investor should have been back in the market months ago. However, day traders in the past week would have lost money trading the S&P on ticket charges because there was very small movement. Unemployment numbers were awesome and should bolster a nice bullish movement. I mean 247,000 jobs lost and an unemployment number of 9.5% is definitely a step in the right direction. Are we out of the woods? The dollar is getting weaker which scares me! The US Dollar Index is trading 78.315 while the Euro has held its own at 1.43 for some time now. Between you and I it would be nice to see the Euro get crushed and the dollar go up like dynamite.

Technical’s show that the S&P has a small resistance spot at 1005 but can easily move through this zone. The question is how high can it go 1100? We need a slow steady gain but first we could use a small sell off to get the dollar up. A recession is no big deal and usually last 1-2 years but job losses and inflation can occur long after the recession is over. No market trades straight up and if it does we should question it! That is the guru’s job to question everything.

Corporate earnings are not knocking the cover off the ball but housing numbers are keeping the market relatively positive. Consumer confidence is down but not slowing the market down too bad today. A 0.5% increase may not look huge but considering this number has not been positive in 3 years we should be receptive about it. Job security is the main reason for the bearish result of the Consumer Confidence Index number. People are very nervous about job security and if the White House is going to secure jobs for the American people. We can look at Obama’s healthcare project in a couple of ways. One, if Americans keep losing job they will need healthcare, so consumer sentiment may change if unemployment rises over 12%. People may not care who pays for health care even if the wealthy get taxed more. Why work hard, get an education, work up the corporate ladder if you can sit home collect unemployment and get free healthcare? We can see this happening already with people that are disgruntled from being laid off.