Gearing Up for Earnings News

Corporate profits are coming, but most of the bad news is probably already out -- limiting the downside

I am viewing the price action of the last week in the Nasdaq as a confirmation of support in the 1742-1696 area. Intraday (short-term) charts look constructive. On a fundamental basis, there is still caution ahead of the first quarter earnings reports, but usually, most of the bad news is delivered to the markets before the bulk of the earnings reports start to flow. Think about what happened this past week. IBM and GE, two of the generals, disappointed but the markets could only move to established support levels; they did not break through and fall off a cliff.

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