All eyes are on earnings as some of the biggest companies are reporting their earnings this week. Yesterday, the focus was on IBM. As IBM fell short, prices went lower in the overnight session to hit lower lows than we saw yesterday morning. The emphasis is definitely on earnings in the short term.
Today, the almighty and impenetrable Goldman Sachs reported. GS has become the symbol of a market gone foul in the wake of immoral, ill-gotten gains. Yet, many in the financial world look to the Goldman goose with admiration and awe. I feel soo badly that GS has had disappointing earnings this morning. Even their trading division fell short, at least proving what I have been encouraging everyone about…………..GS can be beaten!!
It is noteable that when Europe opens, the market takes a tank! IBM was down after the close last night, yet the market did not reflect this until the Europeans came on board. It is amazing that they now have such a major influence on our stock market, and that influence is wielded in the overnight session. That is one of the reasons that I have focused on the overnight sessions so much in analyzing where this market is headed next. Still, it is disheartening that our future lies in the hands of foreigners more and more as time goes on.
So, the big issue, as always, is “where do we go from here”? It is clear that the market has turned south as earnings season has turned sour. This is definitely running contrary to OER 2010. While we made a lower low overnight, and while we may well see lower prices in the near term, I believe that yesterday’s rally was the work of the government buyers pretty much on their own. With earnings reports as they have been, the institutions are not likely to help today, either. If OER 2010 is to remain anything more than a dream of the megalomaniacs currently in power, they must stabilize the market before week’s end.
Today is difficult to handicap. It will be interesting to see if the initial down wave is “contained” again, as it was yesterday. In that regard, bonds (US futures contract) have become a good indicator of recent. If they rally strongly this morning, watch for stocks to fall further. If they fall, despite the terrible housing starts news, then some “entity” has a resurrection of the stock market in mind!
Good luck in your trading today……….and all the best!!
- fishhook
