Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Let The Corporate Earnings Season Begin...

Companies / Corporate Earnings Jan 12, 2010 - 02:36 AM GMT

By: Jack_Steiman


We've had some good earnings reports prior to this evening but when Alcoa Inc. (AA) reports, that's the official kick off to the earnings season. There have been some great reports and some not so great reports thus far but all in all it has been pretty good. Of course, they're good based on lowered expectations but we have to adjust to how the market sees things, not how our hearts and minds see them.

There are some others of importance this week. Intel (INTC) on Thursday and a very anticipated report from financial giant JP Morgan Chase (JMP) Friday. Both will move the markets. INTC is a true proxy for the real economy. Their chips are in everything and thus a good report from them means demand from the makers of those goods is improving. The market would certainly like that. JPM is considered the best run financial institution in the world with Jamie Dimon at the helm and thus big things are expected there. If things are not good there, the market will think things are very bad in the rest of that sector and rightly so.

This earnings season is particularly important to Wall Street because the market has moved up quite a bit in anticipation of much better numbers thus there better be some solid delivery to those expectations. If there isn't, the market will fall harder than it has since the March 2009 lows. If the news is good overall, the market will likely remain in its confirmed up trend. The time is upon us. Let the fun begin.

We started out today with some good futures that received a boost from the overseas markets last night. Asia and Europe were up solidly. and as usual, our futures reflected that. We gapped up at the open but started to fall back, especially the Nasdaq, as those heavily weighted stocks in the Nasdaq were taking it on the chin early on. Stocks such as Apple (AAPL), Google (GOOG), Baidu (BIDU), (AMZN) and a few others. The day was spent moving back and forth with the Dow leading and the technology stocks lagging. Things improved late in the day which is typical action these past ten months allowing everything to finish in the green except the Nasdaq. However, the Nasdaq did close well off the lows so nothing really bad there. Not yet anyway. The action today is typical in that the market continues to grind higher overall with no real super blast higher out of this long lasting lateral formation.
There is a phenomenon going on now that is showing a clear change of character and I for one am happy about it. The PowerShares DB US Dollar Index Bullish (UUP), or the ETF for the dollar, is no longer affecting the market tick for tick such as it had for so many months.

The UUP has had up days that has seen the markets go up and now down days that has seen the market be flat to slightly down. I would be very happy to see that trade disappear in to the abyss and for now there is some hope but I am very cautious about getting too excited. So far so good but I am watching it closely. The UUP threatened to break out of a strong inverse pattern, but for the moment, that pattern has been busted. No guarantee that this will remain the case but the one sector most adversely affected by a strong dollar, the commodity world, is probably happy for the moment about this reality. The UUP must continue to be watched very closely.

We are starting to see some big caps get hit and there's nothing bad about that although many will think it means market death. Not true. These stocks are very overbought and could use a prolonged period of basing to lower to unwind some very overbought oscillators not only on the daily charts but on the weekly charts as well. Not the best combination for more upside although these stocks are loved. Froth like loved. Not easy to keep them down but we are seeing some struggles there. Many are breaking below their 50-day exponential moving averages. Some have also broken their 20-day exponential moving averages as well. Stocks such as BiIDU are trading below both critical moving averages. GOOG is trading below its 20's but above its 50's. AAPL and Goldman Sachs (GS) are closing in on their 50's. GS closer. AMZN is below its 20's. For a very long time these stocks all traded well above their 20's and 50's so we're seeing some changes in behavior. All of them need to be watched for further erosion. Nothing bad for now and really, but like I said, more selling and even some breakdowns would do these stocks some good. They really do need to unwind. If it can be done mostly from a lateral posture, that's great. No matter what, they do need some real unwinding.

Bottom line remains the same. The market is on a buy signal. The market is overbought. It needs to be played cautiously. It needs to be respected for what can happen if you let your guard down. This is a market that demands exposure but not 100% of your dollars. New plays should be done when things have unwound on an individual stock. Buying overbought for the sake of froth can really hurt you. Be careful!



Jack Steiman is author of ( ). Former columnist for, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

Sign up for a Free 30-Day Trial to!

© 2010

Mr. Steiman's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Steiman's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in