Squawk Morning Briefing: Which Way Today?

The two earnings reports which will directly effect the DJIA today are MSFT which reported Thursday afternoon and traded down after hours and MCD which just reported and is being sold. While there have been some positive earnings reports this season, many of the stand outs have been to the downside. Under the surface there are troubling signs, even from companies like IR which reported better than expected EPS this morning. The industrial which produces things that people actually use lowered forward guidance at the same time as it reported good results.

Nevertheless, markets have held up well in the face of poor results. There are many factors that can move markets around over the next few days: options expiration today; The EU summit; an ongoing earnings season. And that can continue to produce some whippy price action.

We don’t depend primarily on fundamentals but it is nice to see how it might align with what we see in the wave action. The current trouble establishing a direction fits with out counts that see a correction in a short-term uptrend. On a larger timeframe we see markets near a top. Once we get there the reality of current situation might start to catch up with markets. However, for the day ahead, options expiration and everything else going on may make for a tricky day.

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