Thoughts After Alcoa's Earnings

Light volume up day at the start of the earnings season SPDR S&P 500 ETF SPY didn’t even trade 150 million shares. Technically, plenty of stocks are starting to test the next level of resistance, either the 50day or the 200 day MA — most of which are still sloping down. This was brought to you by Keystone Trading. Could the failed Head and Shoulder be the bottom for now for these markets? That is what we are testing out for the next few weeks, earnings will play a big part in answering that question. For the most part analysts and companies have lowered expectations for the 2Q, as can be seen by the beat in Aloca AA and CSX Corporation CSX last night. Keystone Trading expects that companies may beat 2Q earnings expectations but will remain cautious about the 3Q – seems like the right thing to do with the unemployment levels still very high – any upbeat 3Q guidance will be taken as a positive surprise by the markets.. Please visit Keystone Trading to learn more. Portugal was downgraded this morning, yet the impact doesn’t seem to be as negative as other downgrades, for one S&P kept a stable outlook for the next 12 months. Also, Greece was able to issue some 6 month bonds at below the 5% level, a decent reentry into the funding markets. Recent upgrades for the semiconductors are helping the Nasdaq gain some relative strength. Broadcom BRCM is breaking out nicely, and now we need are financials to start kicking in some positive sentiments – JPMorgan JPM, Bank of America BAC and Citigroup C all report later this week. These two sectors will be the focus of Keystone the next couple days. (SMH and $XLF).