Big-Time Earnings

Stocks with key earnings reports acted poorly today, but it didn't matter very much.

IBM, GS, EAT, NTRS, JNJ and several others traded down, despite generally good numbers, though it didn't seem to bother the bulls at all. We had lighter volume, but breadth was almost 4-to-1 positive. A weaker dollar helped quite a bit, as oil, coal and steel performed well.

None of that matters much, as market players turn their attention to the most important earnings night of the quarter. AAPL is the big kahuna, but there are other important reports from the likes of CREE, MS, YHOO, WFC and MCD.

If the bears are finally going to see the "sell the news" reaction they keep hoping for, it should come after these key reports are out and digested by the market. Expectations are high and prices extended, so we will quickly find out how much of the good news is already priced in.

Despite the good action today, I noticed quite a few smaller caps that haven't recouped recent losses as quickly as the broad market. There was a bit of non-confirmation, which tends to make me worry about topping action, but we have barely managed more than a half day of any real selling pressure.

The trend is still up, and the action today reflected little worry or concern, but it is the reaction to earnings that will tell the tale. So far CREE is a disappointment, and YHOO quickly reversed down after what looked like some good headline numbers.

long AAPL