DJIM #15 2011

Market waited nearly 5 full trading days before making a mild move in either direction.  As expected here, it was a week of no conviction from the longs and/or shorts with no catalytic eco/earnings on the schedule.

Halleluiah!!., earnings season is upon us as trading has resembled summer doldrums.  The game last week was simply in other large asset classes, USD hits 52 wk low, commods’- metals surged, TSY’s.    Although SPX was pretty flat for the week, we did see profit taking and/or some rotation from Industrials, Transports, HMO’s, all off  2-3% , as sentiment changed for the better in Financials, Retailers, Semi’s.  As cited, both sides are/were hesitant to get in front of earnings and so US market's drifted all week, while Europe and China with earnings coming later outperformed with 2% gains.  That sums up the uncertainties and question marks felt for US corporation’s reports.  It’s a mixed bag for expectations as we’ve had pre-announced blow ups in mid-small names, but none in big influential names.  Tech data points add to the confusion, it changes daily to know really what is going on out there.  The trading outcome in Opticals  covered here this week is a possible light at the end of the tunnel (baked in note) for tech in general as reports start coming in, good/or bad.   This is one Q, you don’t want to be in a tech linked stock heading into an EPS report after a few Q’s where it wasn’t all that dangerous to do so.  

All in, earnings need to come through on the upbeat side to keep the broad momentum going as the market sentiment is waning with tightening sounds picking up /crude price accelerating (can’t keep doing more $5 jumps a week) as it will certainly dampen consumer spending/ growth.   As said last week, investors need to see value in stocks to keep the trend in tact for Q2 or market risks a correction later this month, earnings are the big key to that!

Earnings this week.(click below on site)