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The Numbers

July 16, 2010 – 5:04 pm

The market fell sharply with Google and some banks not beating their numbers and there was a steep fall in consumer sentiment. The week has generally seen very good earnings reports with guidance higher. The market decided to sell off after a strong short term rally last week. It does not help that this is triple witching Friday. Volatility has been at record levels this year and that does not seem to be changing.

The economic numbers are weakening and have been for a month while earnings for corporations still show strong growth. Earnings will likely continue to surprise on the up side providing an underlying base for the market to work from, but for that base to hold and then move the market up further statistics on the economy need to start improving.

That won’t happen until next month as July enters the last half. The economic numbers we are seeing are a result of the fear over Europe and its issues as well as the oil well spill that was depressing everyone. With those two things starting to fade there is likely to be a cessation of depressing news.

Of course this is assuming some other disaster does not rear its ugly head. Look to next week’s earnings reports to stabilize the market. There is just no getting around it- the summer is going to be choppy.

Good Trading
Steve Peasley

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