Well we finally have some bad news tonight as we have the earnings numbers from Google (GOOG) and Intuitive Surgical, Inc. (ISRG). Both are down big after hours, especially GOOG. ISRG is down roughly 15, and GOOG down roughly 27. Now the question becomes, what, if anything, will these two losers do to the market tomorrow!?

The PowerShares QQQ (QQQQ) or the ETF proxy for the Nasdaq is showing only minimal losses thus far of around 5/6 points. Nothing much to talk about. With the market desperately needing some selling, you'd think that the first night of bad news on the earnings front would bring about the beginning of the needed pullback. So far we're not seeing it, although, it's early on. I'd have thought if these two were down big, we'd see an immediate 20-point drop in the Nasdaq. Not to be as this insane bull rages on. We should see some selling for sure tomorrow, at least early on, but after that it's anything goes.

The market is getting its first big test here with these two stocks letting the street down. Will this be the spark, the catalyst to get things to correct or can this market ignore even the worst of earnings news and continue to grind upward?! We will know in a single trading day. Truth be told, the bears have not a single excuse left if they can't crater down this market tomorrow. Between negative divergences and overbought on all time frames, the time is now for the bears to start gaining some momentum. Don't count on it, but you have to wonder what they'll do if they can't sell this tomorrow. Like I just said, the excuses have run out. A small down day won't cut it. They need to smoke this market lower, especially the Nasdaq, where technology lives and where of course, ISRG and GOOG live.

Another day where we started lower a bit, but where the selling didn't last very long. The Nasdaq made it clear it was going to lead once again, which is normal in all bull markets. Higher risk leads in all good markets. As the Nasdaq went green, for most of the day the S&P 500 and Dow stayed red until very late in the day when the Dow and S&P 500 joined the Nasdaq in the green. Just another day in this bull market where the bulls refused to allow things to stay red and actually close negative. Same boring reality for the bears to have to deal with.

The overall earnings picture thus far has been strong. Even GOOG and ISRG weren't bad tonight. Just not perfect. When you've run up a lot prior to the report, you better be near perfect to keep going short-term. They both fell short of perfect. They weren't bad thus you can't or shouldn't expect them to fall apart. A well needed rest and probably a decently long period of under performance, but unlikely to be bad for too long.

Bottom line for earnings has been a big positive in terms of the present and their forecasts for the future. This is what keeps bull markets running higher, even if and when they take their needed pauses to refresh. Until stocks start to report a fall off from expectations, the market is going to have a very tough time spending a significant time falling lower. Always weak periods for sure but nothing sustainable.

So now we get to see how the bears can react to a pair of bad reports from two well respected companies. You have to imagine they are a bit hesitant to get aggressive on the short-side due to how bad an experience it has been for them to have done so to this point. How many times would you allow yourself to get burned is a question you might ask yourself when trying to understand their current mind set. We know how tough it is for many people to get involved in this bull due to a few nasty bear markets over the past ten years. We're in a raging bull and many still can't trust or believe. If you're a bear, you're living this misery in the moment and not in the past so you know it won't be easy for them to just step on it and take too much risk.

Some selling, if not a lot of selling, would be best here but don't count on the "lot" part. We can hope for it but there are so many set-ups that would take place on a plethora of stocks on any selling to come. Lots of stocks would finally get 50-day exponential moving average tests, which is just what the doctor ordered. We can only watch and see what the bears have in them and for me, I hope it's a decent amount which would then allow for some real good entries rather than trying to make money in this difficult environment. We're so extended and every point up makes it that much tougher. Some unwinding would be beautiful. We'll know shortly.

Peace

Jack

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

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.

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