It’s Time For Earnings Pre-announcements

Second quarter earnings won’t start for a few weeks, but we have a few leftover names that are due to report this week like Oracle, Fed Ex and Micron Technology. While we wait for the second quarter reports to begin, watch for those earnings warnings.

Earnings pre -announcements are always key, but while the market is vulnerable and hanging by a thread, it will take on a much more important role. Good reports could launch a short squeeze and get this puppy going again, but a series of negative outlooks could easily open the trap door to lower levels.

This is the point in the market where perma-bulls and perma-bears can get their faces thrashed by leaning the wrong way. My best advice is to play it “light” until this beast figures itself out. You will know when the bottom is in.

One group that has been in free fall is the financials. This is a sector that could “pre-announce” to the downside as new cost cutting pressures will impact earnings going forward. Bad housing numbers and high unemployment stats also figure into the sector’s near term outlook. Technically they could bounce though, and I am not playing the sector long or short for more than a day or two in duration.  I trust the Taliban more than any bank CEO and new regulations should be just adorable for this toxic sector.

As always, the game is on.


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