By Gareth Soloway on April 7th, 2010 11:48am Eastern Time
The official start of earnings season is next week. Be ready for a wild ride! The last few weeks in the markets have been plagued with extremely light volume. This is partly due to the holidays recently and lack of participation by institutions. However, a large part of the light volume has been because Wall Street is awaiting earnings season. It has arrived.
If you remember, the last correction of 9% in the markets was in mid January. That coincided beautifully with earnings season as well. Volume was solid, averaging 200 million on the SPDR S&P 500 ETF (NYSE:SPY). For those of you that are members, you are well aware that I believe that light volume keeps the markets propped up, while heavy volume will drop it. Over 200 million on the SPY is heavy, while under 200 million is light. To give you a little idea about current volume, the last few days, the SPY has had trouble getting more than 100 million in volume. That is unbelievably light.
So here we go. Earnings season starts next week. Will the market correct again like in January? Perhaps, we see fresh highs and the DOW well above 11,000?
After the market closes on Monday, Alcoa Inc. (NYSE:AA) reports earnings. Consensus earnings estimates are for the company to make $0.13 per share but the whisper number is much higher at $0.23 per share. They will need to come close to the whisper number to continue their move higher.
Tuesday has a big earnings announcement as well. Intel Corporation (NASDAQ:INTC) will report. Consensus estimates for Intel Corp. are $0.38 per share but the whisper number is slightly higher at $0.41.
Wednesday sees JPMorgan Chase & Co. (NYSE:JPM) report earnings. Consensus estimates are for a profit of $0.64 per share. The whisper number is again above the estimates at $0.78 per share. JPMorgan has had a meteoric rise in the last two months. Something to truly marvel at. Can the continue to outperform?
On Thursday Google Inc. (NASDAQ:GOOG) reports. Estimates are for a profit of $5.80 per share. The whisper number is in that range. Many will be looking for any further comments about China and future growth expectations.
This is just a taste of the earnings that will be announced next week. The key with these earnings announcements will be the volume that it causes. That will create volatility and action. Most likely there will be a solid move next week. Be ready for it. I will be swing trading and day trading it with my Research Center and Intra Day Stock Chat subscribers. We welcome you to come join the growing ranks of amazing, educated investors.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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