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Hammer Time...Will It Spread? - By Charles Payne

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It continues to be hammer time in the stock market where the earnings season has taken a nasty turn; a woe to those companies with any miscues. Then again, is any stock safe? The Dow closed off with 195 points, but the index held above 17,600, a critical area of technical support. For the year, the Dow is still fractionally higher and keeps its wheels spinning with periodic spurts higher and periodic tumbles lower.

Without a doubt, this trading range is frustrating for investors that have become very comfortable with rare pullbacks of any substance.

It's unlikely the market will trade in such a narrow range much longer. Considering how far the market has come sideways, it is a moral victory. However, all that changes with the Dow below 17,600; the next key support point is 17,100.

Dow Jones Industrial Average

The NASDAQ held around its 50-day moving average of 4,947 and remains in a strong upward pattern of higher lows and higher highs. But the biotechs were crushed…again!

NASDAQ

We've seen stocks from Twitter to Yelp crushed, but it's not just high -flying names. Normally, slow movers, such as Whirlpool, have paid a heavy price for a miss or a subpar guidance. The bottom line is that it feels like the market has entered that period where no news is good news. Consequently, fear is creeping higher as measured by the Volatility Index (VIX).

Moreover, I don't think the market is waving the white flag of surrender, but there's no doubt selling is excessive. Once the crowd decides to bolt, a vapor of destruction is all that remains. If they did that with the entire market, it could be ugly… actually, it would be a relief.

Today's Session

The major equity markets are creeping higher this mornings, showing signs of wanting to erase yesterday's session. Earnings have been mixed this morning with earnings beats and mixed guidance. Below are some of the notable companies that reported this morning.

Company

EPS

Consensus

Revenue ($M)

FY EPS Guidance

FY EPS Consensus

CVX

1.37

B 0.56

34,558

-

3.85

CLX

1.08

M 0.02

1,401

4.45-4.55

4.51

CVS

1.14

B 0.06

36,332

5.08-5.19

5.16

GWR

0.83

B 0.01

397

-

4.72

LPNT

1.00

B 0.01

1,264

-

3.97

NWL

0.36

B 0.02

1,264

2.10-2.18

2.15

We have tons of economic data being released after the market open, including the Institute of Supply Management's (ISM) manufacturing purchasing managers' index (PMI) and the Michigan Consumer Sentiment report.

It's time to start putting our money to use and get ready to ride the market higher.