Don't Count Your Chickens Before They're Hatched

Our friends over in Europe reminded us that a deal is not a deal until it's signed, sealed and delivered. So with riots in the streets of Greece, politicians resigning and Troika members asking for more austerity... it ain't a deal yet.

However, I think the deal will get done because they are too close to the end to give up at this point. And that brings us back to the Melt Up scenario for the market I painted for you guys the other day. I just want to elaborate a bit more on that concept.

I believe the market will keep pushing higher to 1400 before we have any correction worth talking about (greater than 3%). This is probably a 6 to 8 week process of slowly trudging our way up to that point.

The biggest battle will be when we hit the old highs at 1370. That hurdle may take a couple weeks to clear. Once above, we should be able to make new highs around 1400. At that point a correction of 5-10% is likely to test investor convictions before making an assault on new highs.

Do I guarantee that outcome?

Of course not. Perfectly timing the market is a near impossibility. The idea is to create a reasonable thesis of what you think will happen. Then place your investments accordingly. And then adjust as need be. So let's keep tabs on how things evolve and make those adjustments together.

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Best,

Steve Reitmeister
Executive VP, Zacks Investment Research

Today's Top Stories: Monday- February 13, 2012

ZACKS RANK BUY STOCKS

• Aggressive Growth - Chicago Bridge & Iron (CBI) has met or beat earnings in each of last six earings reports. The largest beat was 14.5% higher than the Zacks Consensus Estimate. Read More...
   
• Growth & Income - Cabot Corporation (CBT) earnings per share came in at 61 cents, handily beating the Zacks Consensus Estimate of 55 cents. It was a solid 15% increase over the same quarter in 2010. Read More...
   
• Momentum - NCR Corporation (NCR) reported a quarterly sales increase of 17% at their last earnings report. Annual sales were up 16.5% compared to Q42010 with total sales of roughly 4.8 billion in FY2010. Read More...
   
• Value - Cytec Industries Inc. (CYT) earnings per share were 86 cents compared to the consensus of just 45 cents. It was a jump of 25% and the company's largest earnings surprise of the last four quarters. Read More...
   

Learn how to profit from our exclusive Zacks Rank stock-ranking system with free resources. Read More...

• Zacks #1 Ranked Healthcare Mutual Funds Read More...
• Mutual Fund Homepage

• Bull Of The Day: Tractor Supply Co.
  Full Zacks research report: Read More...
  
  
• Bear Of The Day: Sears Holding Corp.
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• Ahead of Wall Street
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• Zacks Industry Outlook: Insurance Industry Stock Update - Feb. '12
  The impact of a series of natural disasters in 2011 and the ongoing economic uncertainty is still quite palpable in the performance of U.S. insurers. Read More...
  
  
• Analyst Blog Highlights
• Watson Settles Patent Dispute
• NEM to Deliver Akyem Project on Time
• Total System Upgrades Tinkoff
• Full Analyst Blog

• Momentum Stock Picks-February 10, 2012
• Bull & Bear of the Week - February 9, 2012
• Aggressive Growth Stock Picks-Feb.9, 2012

PeopleAndPicks.com:

VIP "MightyMo" advances his position with BUY calls in (BRO), (ISRG), (PCLN) and (V). Read More...

EARNINGS PREVIEW Housing and Inflation in the Spotlight

As earnings season winds down, investors will be kept busy with a full schedule of economic data, including key measures of inflation and the housing sector. Read More...

• GREECE THREATENS STOCKS @ CNNMoney.com
• Market Preview: So Far, So Good @ TheStreet.com
• Wall Street Has Reached an Inflection Point @ FOXBUSINESS.com
• EFSF will provide sizeable part of Greek bailout @ MarketWatch.com

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Best,

Steve Reitmeister
Executive VP, Zacks Investment Research

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