When everyone expects strong Q2 earnigs, there could be no surprises. So, don't hold your breath expecting incredible rallies from Q2 results. Altough a moderate rally, or a range bound volatile movement, is highly possible.
I was reading that they lowered estimates so low that beating estimates should not be a problem. Its call under promise over deliver. The weak dollar is also going to help out most companies again this quarter. AA and GE are both reporting this week, it would not surprise me to see AA trading above 43 and GE above 40 after earnings.
Once the numbers start coming in, then, and only then, will we know how the market is going to react to companies that both beat the numbers, and miss. Once this is known, trades are easy to game.
Everyone expects strong earnings, excepting the earnings estimators that is. Single digit growth expected. Bar lowered. Odd how the forward looking market never saw that. Considering inflation as it (really) has been and stock buy backs, hard to see how they could not beat the lowered bar. Forward outlooks can also be financially engineered, considering "potential" growth in the "NEW" global economy demand. When the catalyst does finally occur to pull the markets back significantly, I expect it is going to be pretty swift and volatile as the exits are going to be crowded. Fortunately, that will pave the way for those highly anticipated (pipe-dream) rate cuts to finally occur. Regarding S&P Futures COTs, large specs (hedge funds?) have been unloading like there's no tomorrow. Small specs have been slowly climbing aboard. Be interesting to see when the commercials change the rules of the game. That being said, hats off to the trend followers, as the last yr or so, has been one of the best equity trend following periods on record. Trend has been getting long in the tooth, however.