StockDesk Wednesday Update: S&P...
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Richard Cox
StockDesk Wednesday Update: S&P 500 Moving Back Toward All-Time Highs as Earnings Continue

Stocks are climbing back toward the highs into the middle of the week, as another run of corporate earnings is providing the next direction for investors.  Mixed results were seen with the three biggest releases (Procter & Gamble, Ford, and Boeing).  But without any large negative surprises, traders are focusing on the positives, with roughly 3/4 of the reporting companies showing quarterly results that were above analyst expectations.  Early in the session, the S&P saw a pullback after erroneous rumors of a terrorist attack at the White House.  Once the story was dismissed, the losses were erased and the S&P is now back on course to post its third straight day of gains.

In macro data, US Durable Goods Orders came in much lower than expected, with a drop of -5.7%.  A smaller drop of -3.0% was expected after the strong rise of +4.3% seen in the previous month. The S&P 500 has moved through all of its short-term Fib resistance levels, and this creates a clear target in the region of the all-time highs at 1592.   Hourly CCI indicator readings have moved back into neutral territory, however, so we might need to see some sideways trading before we start to see some active buyers re-enter the market.  There is a 100/200 period EMA confluence on the hourly charts in the 1561 region, so this marks a solid area for short term bulls to establish positions for the day.

Ford and Boeing Contribute Added Positives  

Earnings are still the main story this week, and Procter & Gamble’s yearly earnings forecast was a disappointment relative to analyst expectations.  the company expects core earnings in 2013 to come in at roughly $4 per share, which was lower than the broader estimates.  Boeing and Ford helped balance this negative release, however, and both companies reported first quarter results that surpassed the consensus estimates.  First quarter profits at Ford were higher by 17% (at 41 cents per share), 37 cents per share was the market estimate.  Boeing reported earnings increased to $1.73 for the same period, much higher than the market estimate of $1.49 per share.

Chart Perspective

Ford Motors (F):


Ford is bouncing once again after making a lower bottom at 12.70.  Its still too early to get bullish, however, because we have yet to see a clear break of the triple top at 13.50.  This area is also the 61.8% Fib retracement of the decline from 14.20, so the area will need to see a daily close above here before entering into new buy positions.

Boeing (BA):


Boeing has gapped above the resistance line created by its recent ascending triangle, posting highs just below 92 before falling back.  Here, we will need to see a drop back into “resistance turned support” at 90 before entering into new longs.  Expect a break below 90 to create a period of sideways trading.



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