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
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

Corporate Earnings and Fed Minutes Hit The Stock Market.......

Stock-Markets / Stock Markets 2012 Jul 12, 2012 - 05:03 AM GMT

By: Jack_Steiman


We are going through a rough period here with regards to earnings these days. A few months back we had Chambers, head of Cisco Systems, Inc. (CSCO), say the economy fell off a cliff. Many criticized him, saying it was just his bad leadership that was causing their problems. They were wrong. He was right. The economy did fall off a cliff. Now we're seeing the fallout as there are a lot of companies warning. More than we've seen in quite some time. The scary part is the size of the warnings. Not what they just reported but their future guidance.

They are lowering their guidance by quite a large percentage. More than anyone thought possible. Double digit warnings are coming from some very large leaders. Those with exposure globally are paying the biggest price in terms of the size of those warnings. Those with exposure only to the United States are suffering less, but still suffering some. So many stocks with global exposure in their own bear markets, such as Cummins Inc. (CMI) and Caterpillar Inc. (CAT), to name a few. With all the problems from overseas they are hitting our economy now in a big way, and thus, taking the earnings with it. Let's face it folks, in the end it's only about how earnings do that decides the direction bigger picture of our stock market. If they are on the rise we rise, and if they are on the fall we fall. It's as simple as that. Whatever news is out there is ultimately judged upon how it affects earnings. Right now, the future for earnings isn't very bright. How far down the road is unknown, but the short-term isn't very bright.

If we study our chart patterns off the June lows, we see that we are more or less in the middle of things. A drop closer to the top of the range, but overall, right around the middle. We still have a gap and the 200-day exponential moving average to protect, but we did lose the 20- and 50-day exponential moving averages today along with a gap top at 2895. It's not great action for the bulls to lose those levels, but they haven't broken by very much at all. Not yet anyway. Neither side is one hundred percent in control, but we have been down five straight days ,and some of the 60-minute charts are getting fairly compressed on their oscillators. We could bounce at any time, but you shouldn't expect too much to the up side. We'd need genuine good news for that to take place. Where that may come from is anyone's guess. When charts look as they do now, the very best thing you can do for yourself is to keep things light and not over play. The more positions you have the harder it is to get good results. A lot of cash is appropriate. It doesn't mean you have to be cash all the time, but holding a lot of it most of the time makes the most sense in this type of environment.

If Mr. Bernanke were to come out tomorrow morning and tell the world he's taking away any possibility of QE3, this market would be halted at the open. It would fall 4 digits worth. Maybe many of them because, let's be honest folks, we're in recession here let alone the rest of the world. If Fed Bernanke said he's not protecting the markets we would crash out. The problem for everyone is that would be too easy. He will never do that as he plays Main Street through Wall Street, and thus, will pump away at will whenever he feels the need to do so. The bears always have to fear the grim pumper, while the bulls have to fear recession and poor earnings. A bear market environment with the bulls having the big defender on its side. Makes things tough for everyone and that won't be going away any time soon.

2860 Nasdaq 100 is the bottom of the gap. Good support there. Back and forth we go with the bears holding the slight edge, but nothing in terms of the bigger picture at this point in time. That can certainly happen but it hasn't yet.



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 15-Day Trial to!

© 2012

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