Earnings Season Increases Risk

A slew of earnings are coming out this week and next. With the market trading near 4-year highs and with the lack of a significant pullback for several weeks now, the mix is a volatile one. The technicals say that prices will continue higher and that the bears are the ones taking on the greatest amount of risk. However, there is a serious whipsaw risk as potential for hard intraday reversals grow due to the factors mentioned here. We are reminded of the old television series Hill Street Blues when the sergeant implored his troops at the beginning of each day “Let’s be careful out there!”