Forward Estimates Are Too High

"The numbers we're seeing are pretty scary. If there's any silver lining it may be that things won't get much worse than this." - Ashwani Kaul

The market struggled to find its way out there today as earnings season took its toll. According to Briefing.com, of the 77 companies that reported earnings after yesterday's close and before this session's open, 52% topped estimates, 35% missed and 13% were in-line. Outlooks were also fairly cautious - of the 49 companies that issued guidance, 45% were negative, 30% were in-line, 21% were mixed and only 3% were positive. The bottom line - many analysts are finally figuring out that their forward estimates are too high given current economic conditions.

Much like yesterday, volume was on the light side and the biggest weakness could be found in the tech space. (We'll see if today's report from Apple's earnings report changes that for tomorrow.) In addition, efforts by the Fed to buy commercial paper from money market mutual funds and Billionaire investor Kirk Kerkorian's decision to pull out of Ford also drew a lot of chatter.

All in all, not a good day and as you can see from the chart above we're stuck in the middle of a relatively large trading range with all focus on the recent highs and lows. Given recent volatility, many are simply waiting for these levels to be broken before committing more capital on either side of this range which frankly makes a whole lot of sense. See you tomorrow!