Collision Course With Dow 10,500 Won't Be a Straight Line
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Your Daily Profit

October, 14 2009

*****Intel and JP Morgan

*****Dow 10,500

*****How to Make Triple the Gains on Gold

Fellow Investor,

Intel (Nasdaq:INTC) reported excellent earnings last night, as I expected. The chip-maker beat on revenues and earnings per share. The stock is up close to 3% in the early going. That’s because Intel’s results weren’t exactly a surprise. During its mid-quarter update, Intel said the quarter was looking good. And the stock ran from $19 to $20.50 over the last few days. And as of press time it’s at $21.00.

Intel’s earnings are especially important because the company beat revenue expectations. As we know, investors want to see revenue growth. Costs have been cut, and if the economy is truly turning around, sales should grow.

*****JP Morgan (NYSE:JPM) destroyed expectations, posting $0.82 in per share earnings when analysts were expecting $0.52. Investment banking was the biggest contributor to JP Morgan’s result. But I’m impressed by the gains the company made in bond trading. Revenues for fixed income went form $800 million last year to $5 billion this year.

Banks have to find new ways to make money, and JP Morgan is doing it.

Another part of JP Morgan’s quarter illustrates how the Cash for Clunker Stock Rally is working. Stock underwriting revenue for JP Morgan rose 31 percent to $681 million, and bond underwriting fees rose 19 percent to $593 million.

In other words, JP Morgan took in over a billion in revenue helping other companies raise cash by selling stock or bonds. When money is cheap, there’s more of it available.

*****The Dow Industrials is on a collision course with 10,000. And I think we will see 10,500 before the year is out. But there will be a dip to buy sometime soon. The Dow’s not simply going to run through 10,000 on its way higher.

Big round numbers tend to stand out as resistance points. And there aren’t any numbers more round than 10,000. Look for a move above 10,000 soon, and then a reversal.

*****The U.S. Dollar is hitting 14 month lows and gold is hitting record highs at $1,070. Gold prices finally broke through $1,000 an ounce on October 6. Gold is up 7% since. But the mining stocks in the Global Commodity Investing portfolio are up 13%, 19%, and 23%.

That’s because profits for gold mining companies rise exponentially compared to the price of gold. As you can see, in one case, we’re seeing a stock move 3X the price of gold. THAT’S how you make money when gold starts to run. And if gold continues on to $1,200 an ounce or higher (which is likely) Global Commodity Investing members will clean up. Find out how you can join us HERE.

Until tomorrow,

Ian Wyatt

Editor

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Posted 10-14-2009 12:47 PM by Ian Wyatt
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