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Market Firms Ahead of Next Week's Early Earnings


Next week begins some early earnings announcements, when a clearer picture will emerge for making decisions on increasing short exposure or long exposure in the market. We believe the technical damage done in recent weeks may require some more time to mend, and that would be normal and expected during this phase of a market cycle.

The major indices put in a sharp, short-covering rally on Wednesday. Today we are trading around a significant "ice layer," or resistance on the Standard & Poor's 500-stock index and NASDAQ. It could be that this initial rally will continue to ratchet the market into the 1100 to 1120 range on the S&P 500. This is a key resistance area to watch.

So far, market internals are not strong enough on breadth or up and down volume to have more conviction. We are evaluating the basing characteristics and running a number of fundamental screens to find strength and stocks with leadership qualities that could begin to break out. Very few stocks are showing true leadership and more consolidation of the recent sell-off may be necessary.

The effort vs. result of the stock market bounce Wednesday appears to be gaining steam. If the bulls remain in control, little should be given up over the next several days.

Next week will begin some early earnings announcements and a clearer picture will emerge for decisions on increasing short exposure or long exposure. The “personality” of the rally does not have the strength we saw in the summer of 2009. The technical damage to the market may require some more time to mend and that would be normal and expected during this phase of a market cycle.

This material presented here has been obtained or derived from sources believed to be accurate, but we do not guarantee its accuracy and it may possibly be incomplete and condensed. The opinions expressed are based upon our study and interpretation of available data. This is not a prospectus; no effort on our part with respect to sale or purchase of any securities is intended or implied. Any stock noted herein is not, and should not be construed as a recommendation or rating to buy or sell any security. Such stocks are intended for illustrative purposes only. It is possible that at this date or some subsequent date the officers, directors and/or shareholders of Sierra Capital Investors, Inc and its affiliates may own securities or buy or sell securities mentioned herein or those not so mentioned.

CAN SLIM® and variations are marks of Investor’s Business Daily, Inc. and affiliates (‘IBD’). The CAN SLIM® Certified mark is licensed by IBD only to signify successful completion of IBD’s CAN SLIM® Training program. IBD does not license, review or approve of, and is not responsible or liable for any investment advice or other services provided by the user. The user is not an agent of, sponsored by, affiliated with, or owned by IBD and is not authorized by IBD to make any representations, warranties, or promises.

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