Recapping the Ecosphere Earnings Storm, Skies are Clearing

Like a hurricane, the lull before the earnings storm of Apple Ecosphere stocks masked its true intensity. Research in Motion (RIM) was well ahead of the storms leading edge, reporting pretty good numbers and upbeat guidance, it provided some wind under the sails of the tech sector, including Apple (AAPL).

About 2 weeks later the chip warriors, Intel (INTC) and Advanced Micro (AMD), presented the next wave. Both taped up their windows, and braced for impact by revising expectations, INTC lowering their gross margin a bit, and AMD taking an extreme stance, revising their revenues down a whopping 15 percent!

After reporting, Intel fared pretty well, coming short of last years numbers, but better than most expected. The result was a 6 percent rise Intel's stock price the following day. It was a silver lining to the winds ahead. AMD followed up with it a dark and grizzly wave, a huge loss in revenue and significantly lowered earnings. But there was no love lost, as the market dismissed it with optimism of AMDs plans for reconstruction. The difference today is that AMD remains under its 20 and 50 day moving averages, where INTC has risen above and creating separation.

After a surge of bad economic reports, the eye of the storm was upon us with Google (GOOG) and Apple (AAP). And GOOG brought clearing skies, the sun shone and the markets felt relieved. Next was Apple, at first glance, they had blowout numbers, but provided ultra conservative guidance. But as anyone along the east coast of the United States knows, the worst was yet to come after the eye has passed.

Mid week last week, volatility in the market started to whip up, as we were deluged with earnings reports. Surprisingly the storm seems to have subsided, as most of the reports were not nearly as bad as expected. And there's been a sea change, as big money decided that sector rotation from commodities to financials was necessary, with Goldman Sachs (GS) benefitting with a breakout from their downtrend. On the commodity side, Gold and Silver have taken a big hit, and agriculture is moving sharply off its highs.

So, now we have the Fed in front of us, and it looks like their rate cut cycle may be coming to an end to curb inflation. There are positive divergences setting up in the major indexes, which should help start an uptrend. Overall, things are looking up for GOOG, RIMM and AAPL, now that the storm has cleared.

What is your opinion, do you think we are poised for an uptrend? Write your comments below.

-zach bass