Earnings and Warnings Keep the Market Off Balance

Financials are starting to play their games ahead of their earnings announcements. JPM announces tomorrow and many other banks announce on Monday and Tuesday. DB warned, and C and MS combined brokerage businesses. Additionally, several other companies like TIF warned, which is continuing the (expected) trend of more companies warning of downside guidance than usual.

The market slowed it's downward momentum to a stall yesterday, but pre-market futures are down enough that it's still a toss of the coin as to whether or not we will get a swing bottom.

Here is a chart of the SPX:
(click on image to enlarge)

Here is a chart of the Dow:
(click on image to enlarge)

You can see the partial Broadening Pattern on the SPX. I've mentioned it before, but it's worth mentioning again, Broadenings are one of the most challenging patterns to handle as a trader. If the SPX drops through 850 it may not go all the way to 820, so I will make my target 820 - 830 and keep in mind that it can turn a little early. The Dow is in a Rectangle. If the Dow drops through yesterday's low, then it opens the way for a move to the 8,200 area or even lower. If the market holds up under the usual onslaught of warnings, then the swing turn is still in play and we could get a bounce for a couple of days. If we see consolidation again, then traders are probably hanging around to see what JPM does tomorrow before making their next play.

One other note: I will be away from the office Thursday, Friday, and Tuesday (remember that Monday is a market holiday). I won't be on VC Thursday. I need to get some important things ready for the next couple of weeks. I will still open the blog threads and post commentary, but I probably won't get to any live updates on Thursday and Friday like I have been able to lately.