Stocks opened weak again, Monday, and stayed under pressure for most of the day. The major averages did close above the lows as they are quickly approaching more important support. The PowerShares QQQ Trust (QQQ) closed well below its quarterly pivot at $87.47 with quarterly S1 support at $83.59.
The Spyder Trust (SPY) and SPDR Dow Jones Industrials (DJI) are still holding above their quarterly pivots at $183.25 and $160.88 respectively. As I mentioned last week, there are more signs that the Dow stocks are becoming market leaders. The Eurozone markets are lower again in early trading, with the US futures showing slight losses.
The McClellan oscillator has dropped further to -108 and is just above the late March low of -115. It needs a day of strong A/D numbers in the next day to form a pattern that is consistent with a pullback in an uptrend. The Arms Index closed at 1.48 but is still well below the March highs of 1.74 and 2.48.
With little economic data this week the focus is, of course, on the earnings season. The outlook for earnings has become more pessimistic since the start of the quarter as FactSet estimates that 1st quarter earnings for the S&P 500 are expected to decline by 1.2%. Also, 93 S&P 500 companies have given negative guidance on their earnings and only 18 companies have upped their earnings guidance.
With market expectations so low, I would not be surprised if the earnings season actually beats expectations. These four stocks report this week and may give us an important inside look at three important sectors.
by Amazon Auto Links
4 Key Stocks Face Earnings Test
#PowerSharesQQQTrust, #SpyderTrust, #SPDRDowJonesIndustrials, #QQQ
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