Macro Trumps Earnings

It seems like almost all the big earnings reports so far have been misses with the stocks tanking AH.  NFLX, WMT, JPM, GS, MS, IBM, YHOO, CMG, etc.  And the futures don't even flinch on those earnings reports.  It is all macro, all positioning now.  It is all about the need to add equity exposure for the underinvested.  The Fed's dovishness is a convenient excuse to buy equities.  Investor positioning just got too bearish and unless something really bad happens (these earnings reports haven't done it), investors need to add long exposure.  It all doesn't happen in a day, or a week, it takes several weeks, up to a few months.

When you are in the middle of that transition from overly bearish investor community positioning to more normal positioning, stocks don't stay down for long.  If it goes down, it tends to only last a few hours, or a couple of days at most.  Then you have those who need to buy, putting pressure on prices to go back up.  Considering how the broad market is acting in the face of all these bad earnings reports, it tells you that there is still a significant group of fund managers that want to buy, regardless of the circumstances.

Still long ES, and given the still relatively high levels of put activity going on, I don't feel like the migration is complete.  I see crude oil trading under 46, down 5 from several days ago, and the energy stocks hardly went down.  Its a teflon market right now, and probably will remain that way until at least the FOMC meeting next week.