Rally is Due to Outlooks

We have seen the market jump over 700 points in the past week. Earnings have been doing as well as we could have hoped for. Many companies are still posting a drop in profit but have managed to beat earnings. This isn't why the market has rallied. Outlooks have been the substantial basis behind this cash money increase.

A decrease in profits is expected as we are still struggling out of this recession. Most companies have been able to beat earnings. The cash money has been made in the outlooks. Wall Street is more concerned with the future right now. They are buying on any sign that the recession is losing its hold.

I would never encourage anyone to buy before an earnings release. That is nothing but a gamble. If you must buy and sell before a release, think about this. Companies that are expecting earnings at the low end of the target will be able to beat earnings and raise outlooks more easily than a company that is highly anticipating to do well. These companies will not fall as far either if they miss. The trick is to determine which companies are being extremely conservative and which companies have low end estimates for a reason. Being able to differentiate these two can pay out some real cash money in the end.