Earnings Season

With earnings kicking off tomorrow, how will the market fare during this earnings season?
Will the market decline as many expect? or will it continue its rally as many suspect?

After looking through 30 stocks that I normally look at, I came away with the feeling of neutrality. Some of the stocks that look bullish have extended themselves while some of the bearish looking stocks are oversold on a larger time frame. For call plays, I like AAPL and GOOG leading up to their earnings but most likely take profit before their releases. I really like the action on MA, which would be my call play of this earnings season. On the bearish side, I remain a short seller of WFC but found no other good put plays.

For the general market, even with the 20-25% run up that we've had, the weekly picture hasn't changed. This is still a bear market rally and to turn the market around, we need to at least get to the 880-900 range. The talks that I'm starting to hear about this being the start of a new bull market is way too pollyannaish.

In conclusion, I think we'll manage to remain bullish neutral through earnings and reach 900. If that happens, figuring out sector rotation would be the next step.