Market Rocks Higher...Second Straight Bad Earnings Night......

The market did what it usually does today. It went higher after numerous attempts by the bears failed to produce a strong technical breakdown by gapping and running lower all day. Day after day went by with all small gaps getting filled. The bulls seized on this with a strong gap up that was running higher all day, closing near the highs. A strong technical day for the bulls as it rises off oversold stochastics on the daily index charts. This has been the way this bull market has gone without fail for years. When the daily chart stochastics, a momentum indicator, get oversold the market rises up, regardless of what's taken place before it.

MACD's are also near lows they haven't visited for quite some time, thus the market is, as usual, hanging tough for the short term. The S&P 500 is recovering the 50's, while the weaker Nasdaq back tests from below. Bottom line for today was the market moving off of oversold instead of the bears creating a gap down and run that would allow the market to stay oversold. This is something they'll need to accomplish if they are to get leg down number two in the near term. No major gap down that runs, and no ability to keep the market oversold, will lead to the bulls taking over once again. The clock is ticking.

So with the clock ticking the question becomes what could be the catalyst to getting the market lower. That's the question most are asking themselves, since this up trend is seemingly endless for many stocks, not including froth, which is in a bear market. The answer is earnings. Thus far, fewer and fewer stocks are reporting great numbers quarter over quarter. Last night, and this morning, saw disappointments from Bank of America Corporation (BAC), CSX Corp. (CSX), Intel Corporation (INTC), ASML Holding NV (ASML), and Linear Technology Corporation (LLTC).

Many of these semiconductor stocks. This evening numbers were bad from Google Inc. (GOOG) and International Business Machines Corporation (IBM) along with American Express Company (AXP). GOOG is getting the usual grace as it's only down about 5-6%, or roughly 25-30$. They missed by 14 cents. If they had beat by 14 cents the stock would probably be up 50-100$ or 10-20%. Bull markets give grace, especially to the froth cult stocks. Who knows if they'll even be down by the time tomorrow is over.

That said, the numbers were bad, and it is down about 5% this evening. If the numbers continue poor then it's highly likely we'll get another leg down in time for the entire market. Earnings are key now as the weather was a big excuse early on in the quarter. Folks want to see if those excuses start to go away by the statements made in the afterhours. Thus far, it doesn't seem to be going all that well. We take the earnings game day to day and watch to see if the bears can ever get anything going.

The story with this market is old, with the failure by the bears to take the whole market down. They have accomplished a bear market in those froth stocks, and I guess one can say that at least it's a start. Now the bears need to take down the areas of non-froth, at least by market standards, not real life standards. The S&P 500 and Dow need to fall hard, but there are no signs yet.

That said, we look at the numbers to give us guidance. The S&P 500 cleared all moving-average resistance, so next up is horizontal resistance at 1872. After that, it's the old highs at 1897. 1846, or the 50-day EMA is now key support. It's not as pretty on the Nasdaq. 4142 is next resistance and that's still far away. That's the 20-day EMA. Support is at 3949, or the 200-day EMA. Terrible earnings this evening have the Nasdaq down about 25 points thus far on the afterhour's futures. It'll probably recover as they buy the cult GOOG back for no good reason. We watch and learn tomorrow. Loads of cash makes perfect sense.