No Confidence

Good Morning. Stock futures are slightly lower on weaker than expected confidence figures from Germany. However, earnings should soon take over as the driving force in the market.

Everybody knows that earnings will be better than the low ball estimates. Especially, in the case of banks and brokers who were able to mark up their assets and benefited from the most active secondary offering market in history. The question is how will the market react? Will the news be sold or will investors push the market further.

Normally, the news gets sold after such a strong run up into earnings. However, the only tactic that has worked recently is to just buy and ignore everything else. To further complicate matters the market will not be maximum overbought until after option expiration so the market still has some room.

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