Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Earnings to Impact Stock Market Trend

Stock-Markets / Corporate Earnings Oct 14, 2009 - 01:20 AM GMT

By: Jack_Steiman


Tis the season folks. Will we have Santa or the Grinch. As we sit in this annoying 1060 to 1080 S&P 500 gap we are wondering if it will ever break out or will it simply fail and ultimately break down. We are going to get our answer very soon. Tonight the real earnings season begins. No more Alcoa's (AA) but the real deal economy stocks are here for review. There's a lot of good news built in thus these stocks better say some real good things or they will get hit. They need to beat on earnings and revenues and do it with real sales and not cost cutting. That will no longer work with their stock prices up 100% or more in many cases.

Besides beating on earnings and revenues, they need to also guide higher or this too will hit the stocks and not allow the S&P 500 to clear that wall at 1080. Intel Corp. (INTC) starts it off but we have other very important stocks reporting this week, especially Thursday. Wednesday we get a huge financial in JP Morgan (JMP). Then we get the real deal on Thursday with Goldman Sachs Group (GS), Google Inc. (GOOG), International Business Machines Corp. (IBM), and Citigroup (C). There will be no doubting where we are come Friday morning, if not tomorrow morning.

I decided to wait until all the earnings were out tonight before doing this report. INTC was very strong as was railroad stock CSX Corp. (CSX), another important leader in a leading sector. CSX was strong and thus we have a double dose of good earnings news for the market to take in overnight. The futures are higher but guess where the S&P 500 is trading after hours folks. Yep, 1080. We closed at 1073 thus there's nothing wrong with a trade at 1080 as it shows strength. If we open near 1080, this will be test number three and the bears are going to have a harder time with this test as each test reduces the numbers of sellers that wait at these critical levels. The bears are sweating tonight. Lots can happen overnight as we have to see what Asia does and then we have to see what Europe does with this information.

If Asia and Europe hold up, and it's likely they will, then the market is going to gap up and that makes the bears even more desperate as gaps are a bulls best friend at resistance if the bears can't shoot it down early on. They'll just give up and let things run through the breakout area. In the end, it's really only about S&P 500 1080 and throw in Nasdaq 2167. We're a full 28 points away on the Nasdaq and even with INTC, the q's are only showing an 18-20 point gap up there thus it will open below the September 2167 highs. If the S&P 500 can clear 1080, however, then the Nasdaq will get dragged up and would likely make a new high soon. With strong earnings from INTC, the odds are increasing that we'll see a breakout but, oh, let me not forget, we'll be overbought at the gap up tomorrow. Just thought I'd throw that wrench in to the mix.

They tried hard to sell this market off early on today. The futures were lower and never really recovered although they weren't close to threatening major support. We started lower and ran down a bit but recovered well above the key S&P 500 1060 level. It didn't make sense that the big money would try to take things down ahead of the big earnings tonight. The whole week is loaded with big company after big company telling us about how the economy is doing thus it made sense to close in the gap ahead of the fireworks. We went green late morning and then spent the rest of the day slightly in the red.

The Nasdaq closed fractionally green. Another day of nowhere and grind. It didn't really bother me as I knew things were about to change in a big way. Tonight they have. Let's see if we actually have something deeper to play on tomorrow. The close tonight definitely sets the market up to make the move. No excuses. A little overbought is no excuse if the bulls want this. Today was the set up. Now we need the closer to finish up the job.

The rising wedge is poor in terms of longer term resolution but you never know. We have poor divergences in this wedge and it really makes you wonder just how far we can go before this ends with a deeper correction. I didn't say bear market. I said deeper correction. Many important levels need to get taken out before we can even whisper bear market.

The top of the wedge is near Dow 10,100-10,200. At the top, if we get there, you have to short. We'd be so overbought and the Dow alone is now working on its 4th, yes I said 4th, negative divergences. Four new highs in price and four lower MACD's. Normally by the second one we're tanking lower. The 4th one still hasn't done the trick but you need to respect it. NEVER letting your guard down for a moment and I'll tell you why.

When those divergences kick in, it'll be very scary. Very rapid fall in prices. It'll catch everyone off guard. So we respect but we don't stop ourselves from participating as long as the reversal candle hasn't shown itself. We're in longs only and won't short until we hit the top of the wedges or get the reversal candle that tells us things are bad before we ever get to the top of the wedges. Only longs for now would be my recommendation, although, do what feels right to you, of course. So many of you have asked for shorts, but I just won't give in until I see a reason to believe the risk reward is appropriate. The trend is still higher. Stick with it. Let's see if the news from tonight on earnings can propel us above 1080 S&P 500.

Jack Steiman

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!

© 2009

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.

Jack Steiman Archive

© 2005-2019 - 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