US TECHS: S&P Outlook; Ringing in Q4 Earnings - Old News...

Source: DailyFX.com

There is no data on Monday but Alcoa kicks off the Q4 earnings parade - announcing after the close and kicking off what is expected to be a very ugly earnings season. The aluminum maker announced plans this week to eliminate 15,000 jobs, close plants, sell assets and cut capital expenditures by 50% to cope with the global economic slump.

In addition S&P placed its credit ratings on review for a possible downgrade based on concerns about the poor operating environment from depressed aluminum prices. Consensus estimates peg EPS at a loss of ($0.05) per share. Later in the week (Thursday) Intel Corp, will post Q4 earnings. Intel added to the weight in equities last week by cutting another $500 mln from its Q4 revenue projections which it expects to drop 20% to $8.2 bln compared with Q3 2008 and to be down 23% from a year ago.

However the upcoming earnings parade is old news and what the equity markets now yearn for is guidance - be it revenue, margin or profit - as no one really has a handle on what the global economic environment will provide. The equity complex on Friday did an about face from the previous trade of shrugging off/rallying on bad news.

SPH did close below the bottom of the triangle and mid Bollinger band, both near 891 and currently rests above another up-sloping trend line at 874. We generally see the 870s as support and wonder aloud if SPH will spend a few days below the flat, meandering mid Bollinger for a few days as it did during the December 22 week, only to pop back above. For upside traction SPH needs to clear 892.