Tuesday, April 12, 2011 9:14 am EDT
S&P 500: 1324.46
Nasdaq Comp.: 2771.51
Russell 2000: 833.86
We have the makings of a greenstick fracture here, a technical warning of a 3% - 5% correction. That’s difficult to fathom with Q1 earnings beginning to hit the news.
No one is hitting the exits in size, yet, but they aren’t buying aggressively. Today will get off to a bad start, as Wall Street begins to fear Q1 earnings may NOT drive stocks higher.
While Alcoa’s (AA) Q1 earnings beat estimates (by one cent), reversing a year-earlier loss, its stock dropped in after-hours trading.
It’s too early to tell if the BIG money will wait for the earnings to do some selling or jump the gun.
Right now, it looks like the DJIA will hold at 12,150 (S&P 500: 1305). Greenstick fractures are just that – not a clean break, but internal weakness that can evolve into a break.
Consider the fact the market is up from its late August 2010 lows;
S&P 500: +27%
Nasdaq Comp.: + 32%
Russwll 2000: + 41%
I think a lot of institutions and individuals missed buying in anywhere near the March 2009 lows. Who can blame them ? The proverbial wall of worry this bull market has had to climb since the bear market bottom has been formidable.
I also blame the financial press (TV and print) for its repeated trashing of the efforts of the government and influential , non-political , individuals to rescue the nation from a total meltdown. While the media pined its negative bias, the BIG money gobbled up everything in sight as the lesser informed investors cowered on the sidelines. Shame on those who portray themselves as reporting the “NEWS.”
Fortunately, my readers weren’t duped, having turned bullish on March 10, 2009, a day after the bear market low – S&P 500: 667.*
This is a light week in terms of economic indicators, but heavy politically with the President’s plan for deficit reduction coming on Wednesday, followed by more salvos from right and left.
*Yes, I know, touting oneself is outright disgusting, but memories are short, and I have a lot of new readers and I feel good I nailed it.
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