Buy Calls – Start Building Overnight Positions Today. Add Next Week.

The overnight news was positive and the market is pushing higher. As earnings season unfolds, the bid will strengthen. Initial jobless claims fell by 37,000 and residential construction increased by 12%. Domestic economic releases have been stable and they will not stand in the way of this rally. Bank earnings have been good and we already have a good sampling from the financial sector. EBay posted better-than-expected results and Intel will release after the close. The expectations are low and any surprise favors the upside. China will post major economic releases overnight. Industrial production, retail sales and GDP will be consistent with a gradual economic recovery. The news will be market friendly and the tone for tomorrow will be bullish. General Electric, Parker Hannifin, Morgan Stanley, Johnson Controls and Schlumberger will post earnings tomorrow morning. Solid results will attract buyers and the market should rally into the three-day weekend. I will continue to day trade, but I am buying some calls today. I will hold the calls overnight and I expect to hold them over the weekend. I am expecting a nice little rally. Corporations are not providing any guidance and that is a positive for this rally. Dismal projections would spook investors. Asset Managers want to rotate out of fixed income and into equities. However, they won't chase. Earnings season will take off next week and they will have all the information they need to buy stocks. Strong balance sheets and cash flow will entice them. The market has had enough time consolidate after the fiscal cliff whipsaw. The economic news has been good, European credit concerns are low and stocks are attractively valued. The market will discount the debt ceiling and it will not be an issue for a few weeks. Buy calls and gradually eased into this rally. . .

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