It’s a busy week ahead on the street, as enthusiastic earnings reports from Alcoa (AA) and JP Morgan (JPM) were brought down to life Friday by Bank of America (BAC) and General Electric (GE)

Headlining earnings this week will be tech favorite Apple Inc (AAPL) and economic bellwether Caterpillar Inc (CAT ). 3M and Microsoft (MSFT), also along with 11 other Dow components, including McDonald’s Corp (MCD ), Pfizer Inc (PFE), Coca-Cola Co (KO), American Express (AXP) and DuPont (DD).

On the technology front, in addition to Apple and Microsoft, the spotlight will also fall on chipmaker Texas Instruments Inc (TXN) and Internet retailer Amazon.com Inc (AMZN), whose results may reveal how consumers are gearing up for the holiday shopping season.

Web media company Yahoo Inc (YHOO) is also on tap, along with United Parcel Service Inc (UPS ), eBay Inc (EBAY ), Kimberly-Clark (KMB), Altria Group (MO) and Hasbro Inc (HAS ).

61 companies in the S&P 500 had reported third-quarter results by Friday and 79 percent of them beat Wall Street expectations. Overall, S&P 500 third-quarter results are forecast to show a drop of 22.6 percent from a year ago.

Wall Street went from red to green on Thursday late in the trading session. Despite a weak performance from financials following Goldman and Citi earnings, energy stocks picked up the slack as crude exploded to fresh yearly highs. The Dow Jones Industrials found themselves positive, up 47.08 points, or 0.47% to 10,062.94. The S&P 500 added 4.54 points, or 0.42% to 1,096.56. The tech heavy Nasdaq climbed 1.06 points to 2,173.29

Morning Outlook

Futures are sliding in the premarket following earnings reports from General Electric Co (GE) and Bank of America Corp (BAC). We have seen the blue chips close over 10K for the first time in a year, will they rally and hold this week’s gains into the weekend?

Dow Jones industrial average futures fell 26, or 0.3 percent, to 9,938. Standard & Poor’s 500 index futures lost 2.90, or 0.3 percent, to 1,086.90, while Nasdaq 100 index futures declined 4.00, or 0.2 percent, to 1,744.50.

BofA Still Stinking it Up

Bank of America Corp (BAC) posted a net loss of $1 billion, or 26 cents per share, for third quarter, compared with net income of $1.18 billion, or 15 cents per share, in the same period last year. In addition, the nation’s largest bank set aside an additional $11 billion in loan loss reserves, $5 billion more than the same quarter in 2008.

Finance Arm Still Hampering GE

General Electric Co (GE) posted a 44-percent decline in profit to $2.4 billion, or 23 cents per share, compared to earnings of $4.3 billion, or 43 cents a share a year ago. On the top line, revenue fell 20 percent to $37.8 billion

Economic Calendar

9:15 AM
Industrial Production: The index of industrial production measures the physical output of the nation’s factories, mines and utilities. The consensus is for a production increase of 0.2% for the month of September; following a 0.8% rise in August.

9:55 AM
Consumer Sentiment: Consumer sentiment is directly related to the strength of consumer spending, by questioning 500 households each month on their financial conditions and attitudes about the economy. The consensus reading for October is 74, up from the prior reading of 73.5. Recent news on the economy has been better with equities rebounding and initial jobless claims coming down. But the unemployment rate may still be at the forefront of consumer worries.

Market Summary

After falling the prior two weeks, Wall Street recovered those losses and then some by the closing bell Friday. Markets jumped after being slightly negative in the premarket following an upgrade in tech heavy weight IBM. The Dow Jones Industrial average closed up 78 points, or 0.8%, to 9,864.94; a new high for the year. The S&P 500 was up 6 points, 0.6%, to 1,071.49, while the Nasdaq Composite Index rose 15 points, or 0.7%, to 2,139.

For the week, the Dow gained about 4%, its best since the week of July 20, when it was also up 4%. The S&P 500 finished up 4.5% and the Nasdaq up 4.5%.

Crude oil closed up 8 cents to $71.77 a barrel on the NYMEX, while gold fell $7.70 to $1,048.60 an ounce. The 10-year Treasury note was yielding 3.38%, a 12 basis point increase.

Trade Deficit Narrows on Weak U.S. Demand

Exports rose for the 4th straight month on global demand and a slumping dollar, sending the trade deficit to a narrower than expected $30.7 billion in August; a 3.5% decline. The sale of farm products and autos sent exports of goods and services up 0.2 percent to $28.2 billion, the highest level since December. Slumping demand for foreign oil, which fell 5.7%, was reflected in a 0.6% drop in imports, totaling some $158.9 billion.

Big Week of Earnings Ahead: 10K Plus By Weekend?

Tuesday: Johnson & Johnson (JNJ), Intel (INTC). The last comes after the close. Their discussions on the economy are important. Their guidance will be more important. If Intel’s guidance about profits and sales is strong, the stock market could have a big day on Wednesday.

Wednesday: JPMorgan Chase (JPM) and Abbott Laboratories (ABT).

Thursday: Goldman Sachs (GS) and Citigroup (C) IBM (IBM) and Google (GOOG). Goldman Sachs shares are up 124% this year alone. If Goldman misses estimates — the consensus is $4.20 a share — watch out. IBM was the Dow’s best performer on Friday after an upgrade.

Friday: General Electric (GE) and Bank of America (BAC). Toss in Mattel (MAT) as well because it will offer a peek at the upcoming holiday shopping season. GE shares have risen at least 10% every month since February and are fairly close to hitting their 2008 close of $16.20. GE’s guidance will be very important. Watch Bank of America for two things: a successor for CEO Ken Lewis (if one isn’t announced beforehand) and how much Merrill Lynch is contributing to its bottom line.

Market Summary

A decline on Wall Street turned into a sharp selloff in the final minutes of trading Thursday, sending the market to its worst day since the beggning of the 3rd quarter. The blue chips, which have been trading in a pretty narrow range, fell to their lowest levels in nearly a month after the Dow fell 203.00, or 2.1 percent, to 9,509.28. The broader Standard & Poor’s 500 index fell 27.23, or 2.6 percent, to 1,029.85, and the Nasdaq composite index dropped 64.94, or 3.1 percent, to 2,057.48. The Russell 2000 index of smaller companies fell 20.53, or 3.4 percent, to 583.75.

Tomorrow in the premarket the wonderful people at the Labor Department will bring us September’s Employment Situation. The confidence doesn’t seem to high right about now, as the market has fallen 6 out of the last 7 sessions.

Despite the fall in equities, rise in bond prices and the greenback, light, sweet crude rose 21 cents to settle at $70.82 a barrel on the NYMEX.

Jobless Claims Rise

The latest worries erupted when the Labor Department said new claims for jobless benefits rose last week to 551,000. It was an unexpected 17,000 rise in the reading heading into tomorrow’s employment report for September. The jobless claims report showed the four-week moving average of initial applications fell to 548,500 last week from 554,250. In addition, continuing claims rose 2.9 percent to 3.7 million.

GE Close to Selling NBC

Comcast Corporation (CMCSA) is in discussions with General Electric Co (GE), which owns 80% of NBC, about joint ownership of the business, which is valued by analysts at $30bn-$35bn. Under the arrangement being discussed, NBC Universal would be spun off into a standalone company, with Comcast owning 51% and GE holding 49%.

Hmmm so let’s see, do shareholders like it? Comcast fell 7.17% to $15.67 during trading today. I would say that’s a pretty emphatic no against the worst of the 3 major networks…

A $300 million cash-for-clunkers-type federal program to boost sales of energy-efficient home appliances provides a glimmer of hope for beleaguered makers of washing machines and dishwashers, but it’s probably not enough to lift companies such as Whirlpool Corporation (Public, NYSE:WHR)and Electrolux out of the worst down cycle in the sector’s history.

Beginning late this fall, the program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances. The money is part of the broader economic stimulus bill passed earlier this year. Program details will vary by state, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications. The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November. (Unlike the clunkers auto program, consumers won’t have to trade in their old appliances.)

“These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy,” Energy Secretary Steven Chu said in a statement announcing the plan. Only appliances covered by the Energy Star seal will qualify. In 2008, about 55% of newly produced major household appliances met those standards, which are set by the Energy Dept. and Environmental Protection Agency.

The money can’t come soon enough for the home appliance industry, which is mired in an unprecedented sales slump that began when the housing market cooled in 2006. Since then that slump has worsened considerably. Shipments of washers, dryers, refrigerators, and ovens dropped 10% in 2008 and are down 15% through July, according to the Association of Home Appliance Manufacturers. “It’s brutal,” says Raymond James Financial, Inc. (Public, NYSE:RJF) analyst Sam Darkatsh.

The leading appliance makers have felt the pinch. Whirlpool of Benton Harbor, Mich., which controls about 40% of the U.S. market, has seen its sales drop 20% through the first two quarters of this year. North American shipments for its Stockholm-based rival Electrolux, meanwhile, have dropped for a dozen consecutive quarters. Both companies have laid off hundreds of workers, and General Electric Company (Public, NYSE:GE)mulled shutting down an entire refrigerator plant earlier this year until deciding to keep it open with a reduced workforce.

Stocks rose Thursday, as all three major averages advanced, with the blue chips making it 4 winning days in a row. The Dow Jones Industrial Average rose 95.61, or 1.1 %, to 8,711.82, while the Standard & Poor’s 500 index advanced 8.06, or 0.9 %, to 940.74. The tech heavy Nasdaq composite index saw its best finish since the beginning of October, rising 22.13, or 1.2 %, to 1,885.03. The Russell 2000 index of smaller companies rose 6.38, or 1.2 %, to 522.02. Technology stocks advanced ahead of profit reports from Google Inc. and computer maker International Business Machines Corp.

U.S. oil prices rose on Thursday, tracking a late-day rebound on Wall Street. Benchmark crude for August delivery added 48 cents to settle at $62.02 a barrel on the NYMEX

Morning Outlook

After a winning week for the bulls, Wall Street is heading for a pullback to close out the week after disappointing results from bellwether GE and troubled financial giant Bank of America. Dow Jones industrial average futures fell 50 points to 8,619. Standard & Poor’s 500 index futures lost 6.20 at 929.50, while Nasdaq 100 index futures dropped 5.75 points to 1,507. The market will also get housing news in the premarket to either fuel or suspend the fall left by this morning’s earnings reports.

Currencies and Commodities

The dollar fell 0.3146% at 93.634 yen in the currency market. The greenback strengthened against European currencies, as the euro depreciated 0.4008% to $1.4092 while the pound lost 0.8942% to $1.6292. Gold fell $1.30 to $934 an ounce, while silver depreciated 0.57% at $13.16. Light, sweet crude for August delivery fell 29 cents to $61.73 per barrel on the NYMEX; a 0.47% decline following yesterday’s spike.

On the Corporate Front

Despite a sales drop of 13% to $23.25 billion, lower than the $23.59 billion predicted by analysts, profit rose 12 % to $3.1 billion, or $2.32 per share for International Business Machine (IBM). Analysts expected $2.02 per share. The company also raised its full year guidance to $9.70 per share, up 50 cents form their initial January estimate.

Google posted net income of $1.48 billion, or $4.66 a share, compared to $1.25 billion, or $3.92 a share, in the year-ago period. Revenue in the three months ended June 30 totaled $5.52 billion, compared with $5.37 billion a year earlier; totaling a 3 % rise. Despite beating analyst expectations of $5.49 billion, some expected a better result from the search giant.

General Electric reported a second-quarter profit of 26 cents a share, topping consensus estimates of 23 cents a share. Revenue of $39 billion was slightly below the $42 billion analysts predicted. Revenue fell 17%, far greater than the 10% Wall Street expected.

Earnings for banking giant Bank of America (BAC) fell to $2.42 billion, or 33 cents per share, compared with a profit of $3.22 billion, or 72 cents per share, in the year ago period. Revenue of $33.1 billion missed analyst estimates.

Economic Calendar

8:30 AM
Housing Starts: Measures initial construction of residential units for the month of June. Housing construction impacts so many other segments of the economy, from consumer spending on appliances and material to labor. The consensus figure is 530,000 units, down from 532,000 in May, a rise of 17.2% led by the multifamily component which posted a 61.7 % gain.

After fluctuating early in the trading session, technology ahead of Google’s earnings and the premarket results by JP Morgan led all three indices higher for the second consecutive day. The Dow ended with a gain of 95.81, or 1.2 %, at 8,125.43. The Standard & Poor’s 500 index rose 43.64, or 2.7 %, to 865.30, and the Nasdaq composite index rose 43.64, or 2.7 %, to 1,670.44. The Russell 2000 index of smaller companies rose 12.75, or 2.8 %, to 473.88.

This was the markets highest close in nearly 2 months. The Dow is now up more than 24.1% from its March 9 closing low. The S&P 500 is up 27.9%, and the Nasdaq is up 31.7%.

Morning Outlook

Overnight in Asia, equities advanced following the up day on Wall Street. Japan’s Nikkei 225 stock average added 152.32, or 1.7 %, to 8,907.58 while Hong Kong’s Hang Seng pared gains to close up 18.28 points, or 0.1 %, at 15,601.27. Stocks rose in Europe after earnings released by Citigroup, and General Electric, who both beat the street. In Europe, the FTSE 100 index of leading British shares was up 36.78 points, or 0.9 %, at 4,089.76 while Germany’s DAX rose 46.20 points, or 1 %, to 4,655.66. The CAC-40 in France was 42.68 points, or 1.4 %, at 3,080.86.

In the U.S., futures are mixed before the opening bell to start the last trading session of the week. After rising almost 30 points following reports from C and GE, Dow Jones industrial average futures are up 12, or 0.2 %, to 8,075. Standard & Poor’s 500 index futures are up 0.2, or 0.02 %, to 861.70, while Nasdaq 100 index futures are down 5.50, or 0.4 %, to 1,346.50 while digesting news from Sony Ericsson and Google.

On the Corporate Front

Google (GOOG) took in first-quarter revenue of $5.5 billion. That was up just 6 % from last year, marking the first time Google has posted less than double-digit revenue growth. Google earned $1.42 billion, or $4.49 per share. That was a 9 % increase from $1.31 billion, or $4.12 per share, at the same time last year. In March, the company cut approximately 200 workers to contain costs during the economic downturn.

Citigroup (C) reported its best quarterly results since the fall of 2007, beating analyst expectations. Overall, the loss to common shareholders was $966 million; the company lost 18 cents per share compared to the 34 cents expected. During the 1st quarter of 2008, C reported a loss of more than $5 billion, or $1.03 a share. Revenue came in at $24.8 billion doubling last year’s number.

Multinational conglomerate General Electric (GE), whose capital arm’s holdings are still concerning, posted earnings from continuing operations of $2.92 billion or 26 cents per share. Greater than the 21 cents per share forecast by analysts.1st quarter earnings for the company were down 36%, with net income of $2.74 billion, down from $4.30 billion, or 43 cents per share, a year earlier.

Sales for Sony Ericsson fell 26%, as the company posted a $387 million net loss in the first quarter and said it would slash an additional 2,000 jobs to cut costs.

Economic Calendar

9:55 AM
Consumer Sentiment: Consumer sentiment is directly related to the strength of consumer spending, by questioning 500 households each month on their financial conditions and attitudes about the economy. The consensus reading for April is 58.5, up from the previous reading of 57.3.

Stocks surged Thursday to their highest levels in two months after banking giant Wells Fargo & Co. surprised the market with an early profit report that blew past analysts’ expectations thanks to a strong pickup in its lending business. With traders not wanting to be short financials heading into next week’s earning, the Dow rose 246.27, or 3.1 %, to 8,083.38. It was the blue chips’ first close above the 8,000 mark in nearly a week and the highest finish since Feb. 9. The Standard & Poor’s 500 index rose 31.40, or 3.8 %, to 856.56, while the Nasdaq composite index rose 61.88, or 3.9 %, to 1,652.54. For the short holiday week, the S&P 500 rose 1.7 %, the Dow Jones industrial average gained 0.8 % and the Nasdaq composite index climbed 1.9 %. The S&P 500 is up 26.6 % from its March 9 bear market closing low, but it is still down 45.7 % from its record high of October 2007.

Morning Outlook

Markets in Asia were mixed to start the trading week; exporters rose as the dollar strengthened. Japan’s Nikkei 225 stock average closed down 39.68 points, or 0.4 %, to 8,924.43. South Korea’s Kospi gained 2.22, or 0.2 %, to 1,338.26, while China’s Shanghai index climbed 2.8 % to 2,513.70. On Saturday, China reported that loans in March surged to a record high of almost 1.9 trillion yuan as the country’s massive monetary and fiscal stimulus has spurred growth amid the downturn.

In the U.S., futures are in the red; indicating a selloff to start the trading week. After being closed for Good Friday, Dow Jones industrial average futures fell 62 to 7,955. Standard & Poor’s 500 index futures retreated 7 to 845.30, while Nasdaq 100 index futures lost 7 points to 1,329. With major companies reporting earnings this week, including General Electric (GE) and Johnson and Johnson (JNJ), the market will have its work cut out to see its 6th consecutive weekly gain.

On the Corporate Front

On Friday, the Federal Deposit Insurance Corporation (FDIC) said U.S. regulators closed Cape Fear Bank of Wilmington, North Carolina, and New Frontier Bank of Greeley, Colorado, which became the 22nd and 23rd U.S. banks, respectively, to fail this year.

Prescription benefits manager Express Scripts Inc. (ESRX) said Monday it is buying health insurer WellPoint Inc.’s (WLP) pharmaceutical benefit management subsidiaries for just under $4.68 billion. The companies expect the deal to close in the second half of 2009.

Economic Calendar

A host of economic date this week that is sure to affect trading, but none today!

Who is Greg Simmon’s?

He’s the guy behind the video’s that everyone finds enjoyable/entertaining/true and are rooting for more videos to come… his site ScopeLabs.net

He called me today and after about a good hour on the phone I said why not send me an e-mail on this topic so I can post it on my blog.. so here it is…

Per your question regards my thoughts on this market’s “rally”…

I feel that really NONE of the problems have really disappeared (the commercial RE part is gonna pinch! hence the hiding the “mark to market” on banks books being the next area of fraud, plus the ETFs are screwing everyone and NOT doing what they claim, the PE ratio the dumbest in history, and the 70% of economy being the aging consumer (baby-boomers) + the rest of list that I have which is VERY long! and we are pretty much set for the greatest meltdown in history!

That said, we are/were, like in any “bear market”, due a “bear market rally” which is whats up now.

Attached is my “Fib” work on the next resistance level – - it would be pretty easy to see higher prices on this rally , but I dont think they can juice it all the way to next retracement level at 916+ in a straight-line, but I have been surprised before… my “work” has been in a BUY (the math doesn’t know how to read and doesn’t much care about my thoughts) since Mar 13 at 751 – - notice it does, the “work” on the SPX, catch the big trends.

The play here (inasmuch as I HATE these ETFs and think they will be exposed as pure fraud themselves eventually) is to be “net short” by going long the Dow 30 (DIA) and short the (SPY) S&P 500 – - the reasoning here is TWO-FOLD:

#1 when the market finally has reality set back in, the S&P being “market cap” weighted over 500 stocks leaves tons more room to the downside whereas like I explained in one of the “insights” on my website – - if GE and Microsoft were to open at -0- the damage to the Dow wouldn’t be THAT bad – - a few 3-500 points… HOWEVER if those two (GE and MSFT) opened at -0- the S&P500 would come completely unglued via their market capitalizations are – - even at these low price levels – - HUGE!!!!!!! so its a cowards way to be short the market without losing too much sleep I guess?

#2 you have a mini-lottery ticket by being long the Dow, because again like I explained on my site in the parts regards “survivorship bias”, the fine people that keep that useless index of 30 lousy stocks together will, like they did on the late 90s, replace stocks that don’t/aren’t performing with the ones that are to trick the people (the poor and soon to be poorer “investors”) into THINKING that “stocks” do do well over time – - when the painful FACT is that it is simply NOT true and a LIE!!! so I feel in a short timeframe they will kick out the Bank America’s and or Citi’s (if they dont reverse split) and maybe some other laggards (Intel and Microsoft havent done thing in like 10 years? funny around the time they were put into the Dow …) and replace them with what’s hot of late, so even if the market doesn’t move much the chance of a Dow’s outperformance vs. the S&P still exists thru Wall streets attempt justify their desire to hold onto people $$$ which is always a good bet???

Keep in mind this trade can go against you some “mark to market” so do the trade in 3 parts some here some higher and then more higher and THEN when the legs come off it will pay BIG, similar to late last year when I was shorting the 30 year tres and long the 10 year … I tend to NOT like to hold anything overnight but with this type hedge you get big upside with very limited risk via the Dow and S&P are highly correlated anyways.

Visit his site HERE.

Stocks surged Thursday to their highest levels in two months after banking giant Wells Fargo & Co. surprised the market with an early profit report that blew past analysts’ expectations thanks to a strong pickup in its lending business. Wells Fargo (WFC) says it expects to earn $3 billion, or 55 cents per share, for the quarter ended March 31. Analysts polled by Thomson Reuters, on average, forecast earnings of 23 cents per share. That would be the largest quarterly profit for the company, which acquired Wachovia at the start of the year. Financial institutions including Goldman Sachs (GS) and JP Morgan (JPM) will report 1st quarter results this week. Dow components General Electric (GE) which will report on Friday, and Johnson and Johnson (JNJ) Tuesday, could shed some light on the broader economy with their different business operations.

With traders not wanting to be short financials heading into next week’s earning, the Dow rose 246.27, or 3.1 %, to 8,083.38. It was the blue chips’ first close above the 8,000 mark in nearly a week and the highest finish since Feb. 9. The Standard & Poor’s 500 index rose 31.40, or 3.8 %, to 856.56, while the Nasdaq composite index rose 61.88, or 3.9 %, to 1,652.54. For the short holiday week, the S&P 500 rose 1.7 %, the Dow Jones industrial average gained 0.8 % and the Nasdaq composite index climbed 1.9 %. The S&P 500 is up 26.6 % from its March 9 bear market closing low, but it is still down 45.7 % from its record high of October 2007.

No More Doomsday

You can sense a noticeable change in tone on the street as well as in Washington. President Obama and his economic team have been much more positive in describing where the economy is, and where we are heading. The 44th president stated on Friday that the U.S. economy is showing “glimmers of hope.” Volatility in the marketplace has retreated, as the VIX in the options market registered its lowest close on Thursday since September, before the collapse of Lehman Brothers. You have already seen how interest rates have been driven down by the Fed. In the current quarter we should really start seeing the effects of increasing the money supply has on credit and lending. Throughout the second quarter, the administration’s fiscal stimulus should have a postitive impact on the labor market, slowing the decline of unemployment and help strengthen the overall economy.

Lights Out

On Friday, the Federal Deposit Insurance Corporation (FDIC) said U.S. regulators closed Cape Fear Bank of Wilmington, North Carolina, and New Frontier Bank of Greeley, Colorado, which became the 22nd and 23rd U.S. banks, respectively, to fail this year.