Earnings and market technicals could be headed for a head-on-head collision.
Last week, the three mighty indexes, the Dow, NASDAQ, and S&P 500 did a Cape Canaveral launch, scorching right on by resistance levels. The rocket fuel was provided via a “miscommunication” between the Federal Reserve and JP Morgan Chase & Co. (JPM) and Wells Fargo & Company (WFC).
Both banks experienced a case of loose lips and a blurted out passing Ben Bernanke’s doomsday stress test by announcing dividend hikes and share buybacks. The only problem was that the announcement was planned for Thursday’s market close. JPM and WFC told the world before Tuesday’s final bell.
While the charts make it look like the trio of indexes is racing into orbit, Top Equity News wouldn’t be surprised to see the Dow, NASDAQ, and S&P rally another 4% into first quarter earnings in April.
And that’s when things are likely to get interesting.
According to analysis from S&P, Wall Street thinks that its index members will increase their bottom lines by “a lackluster 0.52% for the quarter.” In fact, analysts are forecasting that six of the 10 main sectors can experience year-over-year declines. They include energy, materials, health care, financials, telecommunication services, and utilities.
The report highlighted that “if the quarter ends with these six sectors in the red, it will be the first time that more than half of the sectors have reported negative growth since the third quarter of 2009.”
Stocks flattened out back then as Q3 earnings were announced from November through December in 2009 (TEN will take that). Heading in 2010, the S&P rallied a touch before a hurtful 8.7% drop.
We aren’t calling for a selloff just yet; you can find those headlines all around the internet. Instead, we will heed Hill Street Blues’ Sergeant Phil Esterhaus’ advice to “be careful out there.”
Stock Market Trends: Market Technicals and Earnings are About to Trade Paint. is an article from: 
