Market Wrap-Up for Oct.21 (GE, MCD, HON, COF, GLD, CVX, CAT, more)

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Today was the last day of options expiration, and you can bet by today's rally that plenty of short-sellers who were banking on a down market in October paid a heavy price. Despite the nice gains in the averages, volume still is not making a super-impressive showing.

This development is just another reason why trading is a very tough game to consistently beat. First you get a taste of making some money with options or the short side. Then you make what you think is a smart bet and the next thing you know, you are giving back all your gains - and then some. With the headlines changing constantly and governments willing to backstop any trouble spots, the short side is quite the nerve-wracking place these days.

Looking at today's movers, earnings results played a bug hand in helping stocks like Altera Corp ( ALTR ), Capital One Financial ( COF ), Honeywell ( HON ), and McDonald's ( MCD ) rack up some big gains. Not participating in the spike for earnings plays were shares of General Electric ( GE ), Schlumberger ( SLB ), and SunTrust Banks ( STI ). It will be interesting to see if Gold ( GLD ) prices begin to make a bullish move soon, as it is all but a certainty that European leaders have begun to get their currency printing presses ready to go. Many investors have been surprised as to why gold has not begun to rally sooner. Whether it was the options overhang this month or just being simply over-owned, these last two months of the year could be telling as to what the multi-year trend for gold will end up looking like.

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Prisoner to the Markets

Yesterday's stock market volatility/confusion was a prime example of how market reactions have come to control how politicians act. One minute, there was a story about how the EU leaders would likely delay this weekend's summit, then less than two hours later (after the market had dipped significantly), news came out that the summit would still take place. The markets subsequently rallied back on that news.

It's a dangerous game that politicians are playing when they make decisions based on minute-by-minute market reactions. You could say that trend the reason we haven't swallowed the tough pill and let bad businesses learn their lessons the hard way. Hard landings and recessions are a natural part of the business cycle, but in recent years, the Federal Reserve (and Washington in general) has done everything possible to alleviate normal economic pains. At the same time, the government has dug a progressively deeper hole for the country to climb out of.

It's not that I am against the market rallying, but there are days when the gains feel quite artificial. Our focus remains on real data and earnings for signs of hard evidence that a proper market foundation is being set.

Telling It Like It Is

I saw a great quote from George Orwell that sums up our daily mission at Dividend.com:

"During times of universal deceit, telling the truth becomes a revolutionary act."

Having been a student of the markets for several years and learning the many nuances that comprise stock market investing, it's safe to say that many things have changed. In the early days of business media, the focus was on objective reporting. Headlines were determined by real events, and the details around the stories were explained accurately and succinctly. I wish I could say that was the case these days.

Some good sources of info still exist, but business television has really devolved over the past several year. Unfortunately, TV is still the big bazooka that feeds investors stories and breaking news. I don't expect the TV ratings chase to ever stop, and so the "play-by-play" drama we see daily will probably never change. That said, I'd like to take this opportunity to thank our nearly 28,000 newsletter subscribers for allowing my team and me to provide you with our daily take on news that can make a difference in your investing approach.

We often receive feedback from readers of our newsletter, and we truly appreciate the word of mouth support that we get. We will continue to do our best to help investors achieve great investing results in our daily content and our industry-leading Best Dividend Stocks List .

A Look to Next Week and a Weekend Preview

Looking ahead to next week, quarterly earnings will be super-heavy once again, with several big names slated to post their latest reports. We will see results from the likes of Caterpillar ( CAT ), United Parcel Service ( UPS ), Boeing ( BA ), Chevron ( CVX ), and plenty of others.

Be sure to catch up with our latest watchlist updates this weekend on Dividend.com Premium , including reports on earnings/story stocks, analyst upgrades/downgrades, dividend ETFs, and much more. And as always, you can view our current recommendations on our industry-leading Best Dividend Stocks List .

Thanks for reading, and I'll see this weekend! P.S. Please pass this e-mail on to someone you think can use some financial motivation as well as being kept in the financial news loop that could affect them.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: ALTR , BA , CAT , COF , CVX

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