And S&P futures are up more than 2 points this evening. It looks like a potentially stronger open for Wall Street Thursday following better than expected earnings from Yum! Brands (YUM) and Genentech (DNA) (I list Yum! first because eating their food over the course of many years will eventually lead to the need to use Genentech's medications - ha, ha - though really when you think about that, it's not so funny). American Eagle Outfitters (AEO) also posted stronger than expected same store sales.
If you saw last week's consumer credit numbers (rising at 6.6% annual rate in May) you''ll realize that many Americans who can no longer use their home equity as an ATM have turned to the use of credit cards. Eventually the credit card ATM will run dry as well, but it helps to explain why retail sales have not imploded. JUST SAY CHARGE IT!
So the Dow was up 76 today and the S&P rose 8 to 1518. I just don't know what the excitement is about on these up days. I hate to be a stick in the mud, but this is starting to turn into Ground Hog Day with some up days and some down days, all within the confines of S&P 1490 and 1540 -- an ongoing broken record since late April.
What will it take for a breakout?
I talked to an old friend yesterday - John Bollinger, of Bollinger Capital Management - yes, the guy who invented the Bollinger Bands. John told me that he expects earnings season to turn out much better than it has started off and that as the market realizes this it will start to rally. John did note that breaking through resistance at record highs is always a tension filled time for the markets, but once the breakout occurs he says there is a potential for a pile in and that markets in his words could "tack on a quick 5%". John declined to give a specific target, but do the math yourself on what an extra 5% would mean to the averages. John, by the way, is doing fine and dandy out on the west coast.
All bets, of course, are off if there is a market dislocation due to credit issues.
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