Anticipation of positive earnings reports probably would have helped the market bounce today anyway, but Meredith Whitney's CNBC appearance and bullishness on GS and a few other financials is what really helped to move things along. In addition, the over-anxious bears found themselves trapped when we suddenly reversed from weakness in the opening hour.
We had taken out the lows from Friday when the buying came in and it was then straight up the rest of the day. It was quite an unusual swing and probably caught a lot of folks by surprise.
There were some very big reversals today and some very good action, especially for financials, but volume was mediocre and we didn't do anything technically to reverse the downtrend that began in mid-June. It was a good countertrend day, but there isn't much to suggest follow-through unless earnings reports come in well.
And now we will have some earning to anticipate. The big report tomorrow morning will be Goldman Sachs. It is widely anticipated that they will knock the cover off the ball, but the big question will be how much of a "surprise" will be enough to avoid disappointment?
NVLS is the first big technology report and it looks a little soft but guidance will be the key there. DELL is trading down a little following some cautious guidance.
Today we enjoyed some high hopes about earnings, but for the rest of the week we'll be wrestling with real numbers. We raised expectations today and that is going to make the job much tougher for the bulls. They were anxious to buy in front of the news today, especially with a little prodding from Whitney, but betting on earnings can be a very difficult way to make money in the market. It was a good day, but was it driven by hope? Is that something you can stick with for long?
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