Has anyone been swimming naked?

By Colin Twiggs
April 12, 2016 5:00 p.m. AEST (3:00 a.m. EDT)

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The S&P 500 has run into resistance at 2100 as the quarterly earnings season kicks off. 21-Day Twiggs Money Flow is falling, indicating (medium-term) selling pressure. Reversal below 2000 would warn of another test of primary support at 1820 to 1870.

S&P 500 Index

Quarterly earnings per share (as reported) have declined since Q3 2014.

S&P 500 Quarterly EPS

When we break this down by sector, it is clear that Energy is responsible for the sharp fall. So why the pessimism about this quarters earnings releases?

S&P 500 Sectors - Quarterly EPS

There are concerns that the contagion is spreading to other sectors. I covered falling profit margins (in the nonfinancial sector) and shrinking net interest margins of major banks last week. There were already signs that earnings were dipping — in Materials, Utilities, Financials and (surprisingly) Health Care — in late 2015.

Thursday, with a number of Financial heavyweights scheduled to release earnings, should give an inkling of how bad the most recent quarter has been.

S&P 500 Scheduled Releases

.... and if anyone has been swimming naked.

More....

Know that prudent, cautious, self-control
Is wisdom's root.

~ Robert Burns (1759-1796)

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