S&P 500 Intraday

 Regardless of the noise today – please note the 5% correction we have had over the past two weeks. This coincided with earnings season.  It is interesting that 3/4 of the companies that have reported earnings beat estimates, according to Bloomberg.  If you look at an average 4Q earnings report, it is typical to see a 8-10% increase in revenue y-o-y but a nearly 20% gain in earnings.  Shows that companies are being run very efficiently; Gavekal says they are being run even more efficiently than sovereigns!

S&P 500 Intraday for past 15 days

The trend from March 2009 seems still well in place. It is clear the pace of stock gains has moderated since about November, and we are having another 5 % selloff. In the graph below there are arrows indicating the 5% corrections that have occurred since the rally began.  In other words, no need to cry wolf yet.  Markets are trading reasonably well and we believe they are in great shape.  In other words, any further weakness in the broad market would be seen as a short term buying opportunity for those investors who have not entered or have a lower than target allocation.

S7P 500 past 12 months

On a similar note, we acknowledge the many tailwinds that are facing investors … they include ( this is a non exclusive list compiled by us ):

And the case for the bulls is as follows:

Bulls ...