Yesterday started out on a positive note, but quickly gave up 150 point gain on the DOW but by the end of the day managed to squeak out a 50 point gain.

This morning we are seeing a similar rally which has actually exceeded yesterday's close, but of course what is important is that we close at this level. Intraday numbers mean very little in the scheme of things.

We are in the lull period before earnings season. AA and some of the key industrials will be the first to report and the numbers are expected to be terrible, but that is the way it was last quarter and the quarter before. By the end of last quarter 86% of companies in the SP500 reported that they had met or exceeded expectations with fully 80% of them beating. I expect to see the same this quarter.

The guidance is the the main driver for future prices however, and this is where the focus should be throughout the earnings season.

We will be focusing on those companies that are cash rich and project progressive gains for the next few quarters. As these are released we will do the analysis and pass it along.

We passed a key resistance line this morning at 1040 on the SP500, but remember it doesn't count until we can see a firm close.