alice

A Bullish Headline!

Woeful earnings threaten to intensify stock-market bloodbath

Got to hand it to MarketWatch, they don’t discriminate.  When trends are bullish they pound the point home while players are at max euphoria and when things are bleak they tout the trend just as vigorously.  Why, in the above-linked article they even threw in some graphics from one of my favorite market data sources, FactSet.

Did you know that S&P 500 earnings growth rate estimates are decelerating?  Well, did you?

earnings growth estimates

This is all well and good.  We have had the memo on earnings deceleration since early to mid last year.  Further, we have had hard data on decelerating manufacturing and now Semiconductor equipment and materials.  This was the macro-fundamental part of the equation that also saw momentum and participation loss in the market’s technicals and internals.

My question is, where in this goofy article are numbers provided that state why disappointing earnings should spur further losses in equities in the short-term?  Where is a calculation for where valuations need to be per current earnings estimates?  Oh, you don’t have one.  So why don’t you tone down the headlines for already slap-happy, frightened investors and provide even reporting as such?  People don’t need a headline like that at a time like this, unless they are contrarian market players.

Here’s another graphic that shows market players agree with the scary headline above.  From Sentimentrader

market sentiment indicators

It’s bullish on a contrarian basis.  That doesn’t mean the market is going to bounce, but it does mean that some important ingredients (SPX technical support, over sold, bleak sentiment backdrop and good old MarketWatch here) are in the mix for that outcome.

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