October 13, 2009

EARNINGS WORRY WARTS

I just have a spooky feeling but then I always do. Like the “Twilight Zone” episode above when William Shatner sees a frightening image, tries to warn the crew to no avail since only he sees it. Was it an illusion? We seem to never know. And despite this metaphorical image, today Mr. Market seems unconcerned. All bad news is brushed-off or spun positively and every dip bought.

Now we focus on earnings and much reduced estimates are, to steal an Eagles line, “programmed to deceive”. That is to say, earnings estimates are low-balled and when beat are spun as “better than expected” despite being lousy.

First in focus is INTC and as this is written their announcement came through beating consensus estimates. I’m shocked!!!

Anyway, in anticipation of earnings announcements stock market volume was as light as yesterday. Breadth was again unremarkable. So there’s a lot of tension in the tape and stocks are coiled to go much higher or fall sharply the other way with disappointments.

INTC trading in the After Hours is below as of 5:10 PM ET. Just remember, they lost money from the previous comparable quarter.

So, INTC did well and IBM’s on deck. We’ll also get some Retail Sales data which must be good (if you don’t look inside the numbers) and FOMC minutes which will get dissected into all its minutia.

So, we go forward in this Twilight Zone environment replete with Alice in Wonderland logic. But, what the hell, we’re in for the ride.

Let’s see what happens and in the meantime follow our pithy comments on twitter.

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, UPRO, MDY, IWM, VTI, TYH, XLB, UYM, XLY, XLF, FAS, UDN, ULE, GLD, DBC, EFA, EFO, EEM, EDC, EWC and XPP.

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