Market follows up gap with more gains

Index & Sector performance 9/17/13

The Market:

The majority of today’s action was in the first half hour of trading when the S&P gaped slightly higher and then ran up seeing the majority of the days gains.  The remainder of the day the market was able to hold those gains and drift higher on what looked to be an overall light volume day.

In economic news, Core CPI came in as expected while headline CPI  was actually less than expected with a 0.1% increase when 0.2% was expected.  Remember headline reflects food and energy while core strips it out.  Tomorrow we have Housing Starts but attention will likely be on the FOMC statement and following press conference starting at 2pm.

Story Stocks:

Microsoft (MSFT)  gave investors something to cheer about today as they announced an increase in the dividend to $0.28 with an ex-dividend date of 11/19/13 and a new $40B shock repurchase program which will replace the previous $40B program set to expire 9/30/13.  MSFT closed up X% today on the news.

Aeropostale (ARO) closed up X% after Sycamore Partners, a private equity firm, announced an 8% stake in the company.

Similar to ARO, Safeway (SWY) announced an entity had purchased a significant number of shares and they adopted a plan to prevent a takeover which immediately starts to fuel takeover speculation.  The news sent SWY X% higher in today’s trading.

The following noteworthy companies are scheduled to report earnings before tomorrow’s open: FDX, GIS, MANU, CBRL

Analyst Comments:

Upgrades 9/17/13

Downgrades 9/17/13

Initiations 09/17/13

Price Target Changes 09/17/13

The Game Plan:

We have our 50 day SMA cross with MACD confirmation that is still providing a good trade.  I wouldn’t wait for crosses back to exit as that could forfeit many hard earned gains and now you want to watch key support and resistance levels.  Of note on the long side is 1695 (shorter term) and 1680 (swing)  in the S&P 500 cash and on the upside the previous highs of roughly 1710 are big.  Will we double top or push through.  What I think would be healthiest is if we touch and pulled back ultimately flagging and letting that MACD play out the Orange/Green set-up.  Otherwise there are starting to be big divergences on the intraday charts and if then the daily loses support and the MACD turns below zero it could start a leg lower.