No. Data does not lie. Click the following link to see earnings data directly from Standard & Poors:
"341 issues (76.15% mkt val) rptd: initial good reports fading, actuals are 2% behind of estimates, and -36.1% behind last year...
Sales down 12.8 with 89 beating last year and 246 falling short
As Rpt EPS for 12 Mo Sep,'09 estimated to be negative ($-1.83 EPS) - first time in index history"
This confirms what I had been noticing as earnings were being reported over the past weeks; revenues were down by massive amounts (typically 20%) as were earnings but the fact that analysts had finally gotten the earnings estimates close was being used as good news by the pollyannas.
This is a(nother) tought time to remain bearish as some LEI's seem to be suggesting we are coming out of the recession but there is simply no way that we are through the tough times given that housing has yet to bottom, the consumer is far from delevaeraged, the banks are far from deleveraged, our government is in debt up to its corrupt eardrums, and the stock market is still overpriced.
From my POV, however, I see this as one sure thing. The market is overbought and weakening, as we have seen before and all the wise old owls I listen to say that experience (along with Dow Theory) tells them that there is more correction to come from the stock market. The young, brash pollyannas are excited and buy more and more each day, almost as if it were 2000 all over again. Yes, we are coming closer to a great buying opportunity on the long side (hopefully) but that is likely a ways off as new dark clouds become visible on the horizon.
My view is that the overall market has significantly farther to go to revalue itself but that tech and the QQQQ will be the strongest during this period and once the true rebound eventually comes.
Author positions: SDS, SRS, PURE, LAD
--Fred