Markets Fight Back From Steep Losses

The markets gapped lower on the back of earnings from International Business Machines Corp. IBM, Texas Instruments Incorporated TXN and Goldman Sachs Group, Inc. GS. While the earnings of all these companies came in better than expected, the common theme of a miss on revenue continued. Cost cutting can boost earnings but it is extremely hard to mask a miss in sales numbers. All three stocks gapped lower today with the markets in a near panic mode. However, no sooner did the market open, then the up move started. The SPDR S&P 500 ETF SPY gapped lower to $105.82, after closing yesterday at $107.29. Currently, markets are almost back to the flat line with the SPY trading at $107.00. The markets are showing an amazing amount or resiliency after some poor earnings reports. Goldman Sachs has jumped to the positive side while IBM and Texas Instruments are well off their lows. The key to the move today off the lows seems to be speculation that China will end policies put in place to cool the housing market. This has caused commodity stocks to jump as growth in China housing would result in a major increase in demand for commodities. Steel, copper and other commodity plays are jumping. Below is a chart of the SPY with the key levels for the day. Gareth Soloway Chief Market Strategist www.InTheMoneyStocks.com