Earnings

After looking around, it seems the only major earnings announcement will come pre-market tomorrow morning by JPM. From what I see in the market in general and ETFs like BGZ that look good, it seems like they'll pullback, it has me thinking that JPM's earning won't be so bad and that may give the market the room it seems to be looking for to bounce a bit (short term).

It makes sense on a couple of levels, 1) JPM is going to probably have decent earnings derived from trading operations, they don't manufacture anything so the margin squeeze is not going to cause a problem. The caveat is this, what JPM reports may be a decent report and the market looks like it's setting up to react to the headline. What JPM will do moving forward seems less sure as the market seems less sure. Don't forget that the relentless POMO regime has given primary dealers a free lunch, JPM happens to be a PD so that should help JPM's earning, again though the caveat is the increasing likelihood that QE3 will not happen, which wouldn't be good for JPM moving forward, but Wall Street controls the media spin and a beat from JPM could easily be turned into a one day rally on its own, even though we all know that what is really important is guidance moving forward, not what you did, but what you will do. Still I fall back to the Wall Street spin machine and their ability to focus attention on a headline beat, rather then the true discounting mechanism of earnings which is, " What will you do next quarter?"

Lets look at JPM's 3C charts.

 First of all, the consistency is not as good as AA's yesterday, but this is my theory. We are starting with the 60 min. chart which is one of the most influential, in this case however, for my theory, it's actually the least influential. We are not looking so much at JPM's long term status as we are the short term movement for tomorrow. We do have a decent accumulation zone around $44.


 The 30 min chart shows a positive divergence today, so is someone loading up in anticipation of the positive spin on a JPM report?

 The 15 minute chart shows the same positive divergence.

 Here the 5 min chart, which is a less influential chart with regard to the big picture, i actually more important for this theory. It's showing a positive divergence, I don't care about the recent dip in the red box as it just makes JPM shares cheaper to buy for a 1-2 day trade.

The same is true of the least influential 1 min chart, there's a positive divergence, much like the market's and we have a recent dip in prices, again irrelevant for my theory.

So what JPM does in the weeks ahead may be very different then what it does in the day/days ahead. That's my theory and I think the charts look pretty good to back it up. If my theory plays out, then it's a good opportunity to pick up shares like BGZ on a pullback. If this comes to pass, we'll see another example of media and Wall Street mixing and the enormous pull Wall Street has on everything. We'll know soon enough.