Commentary: Paul Ebeling on Wall Street
$DIA, $SPY, $QQQ, $VXX
Earnings season begins in earnest this week.
The bar is set high, and participants are hoping they do not disappoint, and since stocks have come off about 8% in value ahead of earnings there is a clear path o higher prices if earnings are solid and overall economic conditions are upbeat.
There there is leadership.
The market can bounce on earnings given the correction heading into this season. If a move is to sustain it must have leadership.
The past 2 weeks of ups and downs has improved some patterns, but not seeing lots of good patterns in sectors that provide leadership for strong moves North.
Growth opps help lead, whether that is growth in tech, small caps/midcaps, or even the large caps selling the world we are growing.
There are growth stocks in leadership positions with good patterns, here are just not a lot of them and not seeing a lot developing yet.
This setup ahead of earnings is can lead to an earnings bounce. After that unless more stocks set up a bit better and make Northside breaks the rebound will be limited the Big Qs: How high and how long?
Key things have to happen for a market to sustain a break higher, and leadership is a Key element. I am watching, but not seeing much yet.
With that in mind, look at stocks with good earnings for the Northside move.
The Big Q: Why?
The Big A: They are the better patterns.
We need energy, software, security software and say home-builders are interesting. And do not forget to look for some play to the Southside, if the earnings bounce does not sustain aka hold and move higher.
Remember, always take what the market gives, it is your money and so your responsibility.
The Bulls Vs The Bears
VIX: 21.49; +2.55
VXN: 27.43; +2.40
VXO: 22.93; +2.95
Put/Call Ratio (PCR) CBOE: 1.03; +0.18
The Bulls dove, bounced, then dove again, but still not low enough.
The Bears are up, but not enough yet..
The Bulls are at: 49.5 Vs 55.5 last
The Bears are at: 17.5 Vs 16.8 last
Support and Resistance
Overall all three major US stock indexes are moving within there support and resistance correction zones, looking for a bottom.
Have a terrific week.
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