Earnings Misses

Earnings Misses

Whether stocks have missed analyst expectations, missed on their respective top line growth estimates, or warned for future revenue misses, when they release their statements they are punished.

For several days it seemed like the overall market would focus on Bernanke’s QEternity buying spree and ignore high-profile disappointments, until Friday.  Like all bad news on Fraud Street; it is ignored, until it can’t be ignored any longer and then the market comes unhinged.  Friday’s drop was the worst sell-off in 4 months.

Until Friday, the market had been shrugging off (as a whole) losses or warnings from the following companies…
FedEx
UPS lowered expectations in Q2 due to slower global growth. Has it improved in three months?  It reports again Tuesday.
Caterpillar (CAT)
Cummins (CMI)
McDonald’s (MCD)
General Electric (GE)
IBM
Chipotle Restaurants (CMG)
Marvell (MRVL)
Google (GOOG)
Microsoft (MSFT)
Advanced Micro Devices (AMD)
AAPL drops the most over 3-weeks since early 2009.

The companies listed above are very large and important to the economy.  If they are warning of the future; what will NEXT quarter look like?  According to the following chart (see above for chart) from Bloomberg, if the recent pattern holds it won’t be good.

Wait a second here – the banks had great earnings! Pfheeew, no worries then.  Ben Bernanke has them cradled in his loving arms.

Trade well and follow the trend, not the so-called “experts.”

Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.

Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom

Futures Data
Value Areas:
ES 1442.25 / 1426.25
POC... 1438.25
YM   13386 / 13272
NQ    2710.00 / 2671.50