It’s Earnings Season–Here’s What To Pay Attention To

  • July 18, 2005
  • Gary Kaltbaum

I am writing this as I sit in the lobby at the Snake River Lodge
in Teton
Village, Wyoming. I recommend it highly. My family has had a blast so
far…except for the speeding ticket I received in a town with a population of
100…no comment!

Random thoughts:

Did you see Jack Nicklaus walking up the 18th at the British Open? All I could
think of was Barry Bonds, Ron Artest, Randy Moss and all the puke athletes out
there right now who wouldn’t know the word “class” if it smacked them in the
face.

Heading for Yellowstone and the Grand Tetons for the next couple of days. I
told you last year I am no longer going to work every minute of every
day…thus the new me…”outdoor Gary.” For all of you who work too hard…GET
OFF YOUR CHAIRS AND AWAY FROM YOUR COMPUTERS…AND SEE THE WORLD! I spent too
many years forgetting there is a world out there. If I don’t make it back, it
means I was eaten by a bear.

Oh…the markets!

Shorter-term, seeing a wee bit of negative divergences right now…but nothing
to get twisted over. It just may mean the market is getting tired after the
“all of a sudden” romp from the day of the terror attacks in London.
For
starters, even though markets are at relative highs, the NEW HIGH LIST has been
cut in half…very simply meaning fewer and fewer stocks are helping out. That
fits in well with the fact that advance/decline figures are starting to wane.
Let’s also add in  that sentiment is about as bullish as we have seen in months (which is bearish and you may have the makings of a pullback soon. IF
that occurs, we wouldn’t sweat it unless volume really picks up and we start to
see a decent amount of breakdowns. instead, any pullback, if it is to occur, I
expect it to be controlled and rotational right now and ultimately buyable.

Some things I am watching:

The RUSSELL 2000 broke out nicely at around 650.  The SOX broke out above
454. The SMALL CAP 600 broke out above 338.  The S&P broke out above 1220. As
long as these areas hold, the market will be fine. Any break below these
levels and I will have something more to talk about.

EARNINGS come out in droves in the next 2 weeks. Regardless of what has
happened in the recent past, pay attention to the latest reactions to the
earnings. That will dictate a lot about what happens going forward. 

Gary Kaltbaum