Brainstorming Thursday - part 1

1. Reaching the hot zone again in sentiment as the expected sideways swings keep the bulls running into a trap. Always a sign for a correction is if 5 out of 6 closes are almost the same as recent days in the SPX are more or less at 1165.

excerpt

Date Published	Percent Bullish	Percent Bearish
03/24	48.9	20.5
03/17	46.1	21.3
03/10	44.9	23.6
03/03	42.1	22.7
02/24	41.1	23.3
02/17	35.6	27.8
02/10	34.1	26.1
02/03	38.9	22.2
01/27	40	23.3
01/20	52.2	18.9
01/13	53.4	15.9
01/06	48.3	16.9
12/30	51.1	15.6
12/23	52.2	16.7
12/16	52.2	16.7
12/09	48.4	16.5
12/02	50	16.7
11/25	50.6	17.6
11/18	46.1	21.3
11/11	44.4	26.7

2. Earnings will rather be disappointing in the USA as the weakness of the EURO is erasing some of the margin or competitiveness. That might be part of the hidden agenda of Ms Merkel`s tough stance on Greece besides the remain that in May are crucial elections in Germany and the current new coalition has already lost quite some ground. Therefor the argument of the bullish Mr Jones is a bit puzzling to say the least.

excerpt

Earnings Will Continue to Be 'Very Robust' This Year

Published: Wednesday, 24 Mar 2010 | 2:48 PM ET

By: JeeYeon Park
CNBC News Associate

Markets remained lower on Wednesday after sales of newly built U.S. homes fell for a fourth straight month to a record low in February. What should investors expect going forward? Michael Jones, chief investment officer at Riverfront Investment Group, and Andrew Kanaly, chairman of Kanaly Trust Company, shared their insights.

“The decline in home sales puts us right back where we were a year ago and that’s probably where we’re going to stay for some time, until employment turns around,” Kanaly told CNBC.

“It was all related to the stimulus and everything else the government’s doing.”

Kanaly said although the housing recovery is precarious and expects foreclosure rates to continue climbing, it will be a good year for stocks.

“We’re going to pull a lot of activity from 2011 into 2012, so corporate earnings are going to continue to be very robust this year," he explained. "So stocks in terms of earnings are going to look good through the first half of the year this year, but beyond that into 2011 and 2012, we’ve got to be pretty cautious."

Jones' Take:

In the meantime, Jones attributed the weak housing numbers to weather-related issues.

He said he is bullish because of the positive corporate earnings.

“We have a great earnings story right now going on in the market,” Joneds said. “That growth is coming from overseas—nearly 50 percent of the earnings from the S&P are coming from overseas sales—so the domestic story isn’t quite as powerful on the domestic stock market as it might have once been.”