 Hey, everyone, this is Mike Kramer of mock capital with a weekly check-in So this week obviously a big week for earnings market Certainly has stalled out over the last couple of days as we sort of expected going into OpEx knowing that the call where the call Walls were knowing that CTA flows were dwindling now this week all the attention is going to at least for the first part of The week and at least going towards the end of the week Towards earnings and next week of course you're going to get a Fed meeting and that's going to take center stage But obviously this week the big story is earnings and you know The truth of the matter is is that a lot of this rally? We've seen has been concentrated to the biggest stocks in the Nasdaq 100 and it really becomes clear when you start breaking it down and looking at the actual data So when we look at the actual data the Nasdaq 100 from the March 13th low Which was that Monday? Until today What we see here is that if you just look really quickly And you take the point values for each of the Top four stocks and you just quickly add them up And you know you do a little bit of rounding what you see is that you get 100 you get 580 points at it from just the four top stocks in total the Nasdaq has gone up 1139 points divide that by 139 48 and you get 51% of the Nasdaq's gains over the last call it month or so have been driven by only four stocks and We're not including even in this meta alphabet ISRG For full disclosure, I happen to own Microsoft Apple Amazon Google and ISRG so Again, that's just for full disclosure. So everyone knows that I happen to own these But again, these are the stocks that have been driven driving the market higher and it doesn't become any more evident when you look at it from this perspective so when people talk about, you know, this being a Rally it's a rally of the top eight or ten stocks in the Nasdaq 100 and we know that has spill over effects into the S&P 500 because the market cap weighting of the S&P and the Nasdaq are Similar in terms of this top stocks in both of the indexes. So the fact that they're leading the way in the Nasdaq 100 Also suggests that these same stocks are leading the way in the S&P 500 as well and so it really it really brings home the the amount of the move that we've seen in the markets and and really the Concentration to that and so then all of a sudden, you know, how how important the earnings become They become very important because if any one of these companies begin to slip That could change the tone of earning season and where the markets go in general tomorrow You're gonna get Microsoft and you're gonna get alphabet again. I own both of those stocks They're gonna be reporting results after the close and how they do may start setting up the rest of the week in terms of How some of the other names begin to go as well Nasdaq 100 We've had, you know 14 companies in the Nasdaq 100 report so far. So not a big sample size But to this point earning surprises have disappointed 5.8 percent below and if we look at our little calendar here Quarter this is quarter one 2022 quarter 23 quarter three quarter four So here's quarter one calendar year 2023 5.8 percent so far one of the worst earning seasons We've had by surprises Going back to the first quarter of 21 When we look at the sales surprise just a little bit better But that's not surprising in some ways because we've had some decent economic growth when we look at the growth rates for earnings You can see earnings down 26.7 percent thus far on the Nasdaq 100 Clearly the worst earning season we've had from an earnings growth perspective now going back to last year Sales growth continues to hang in there. That tells us obviously right off the top of the bat These nasdaq companies are seeing a lot of margin compression That they're not able to translate the sales growth into earnings growth So we're going to have to see how this trend continues to develop. So here's your earnings estimates for the nasdaq 100 2023 coming down coming down coming down Then we go into 2023 then we go into this year. This is 2023 It swaps from the blue line to the orange line You can see those earnings estimates are still coming down for the nasdaq 100 only swap over to the smp 500 You're going to see a very similar trend smp 500 Earnings estimates continue also to decline here. You can see the smp 500 coming down. Here's your blue line This is 2023 2023 and then it swaps over to the orange line 2023 still coming down Down to 218 dollars per share We'll look at smp 500 almost a quarter of the companies one almost 20 percent of the companies have reported results So far earning surprises going better than expected here. You can see earning surprises For the first quarter coming in better than what we've been seeing and more recently So not nearly as bad as the nasdaq sales surprises coming in basically in line with the last couple of quarters So no real surprise there when we look at um Earnings growth you can see earnings growth. Here's your first quarter of 2023 Down one and a half percent so better than what we saw last quarter Sales growth also better than what we saw last quarter But again, this talks to margin compression But it also talks to how important earnings are going to be for the rest of the Earning season because you still have a huge amount of companies that need to report results And unless these companies continue to deliver Those earnings estimates are going to continue to decline for the nasdaq and for the smp 500 and these things matter Quite a great deal, you know in that lopsidedness of the earnings of Of how the construction of the nasdaq 100 is is one of the reasons why you've seen the nasdaq composite not make a new high While you've seen the nasdaq 100 make a new high compared to the february second number But this is also one of the reasons why you're seeing the index stall out here too Is because the market's also waiting to get some clarification in terms of where these earnings are going to go For the balance of the quarter if they begin to come in and they're better than expected And you begin to see guidance coming in better than expected then perhaps you can get some further upside If these earnings disappoint and the guidance isn't that great Um, so that creates a whole another issue for the market on top of many of the other things we've been focusing on This big level of support continues to be the 12,800 level If this level breaks we're talking about the potential to move back down to 12,500 or so In the nasdaq composite when we flop over to the smp 500 you can see that we had a little bit of a rising wedge here We're still looking for downturn in the smp 500 based on this cycle We haven't made any other highs compared to where we were as of really Around the same time as the job report came out. So again, if the cycle is still in play We're looking for a move down into the beginning of june based off of this 80 day cycle We've been seeing in the the smp 500 So again and also remember We haven't been able to really breach above that 4,200 level Which has also been the call wall and that still remains to be the case So the big level of support we're watching right now continues to be around this 40 50 to 40 60 region on the smp with a break Probably setting up a much sharper decline Going into an after earning season when we look at a chart of amazon um, you know, the stock has sort of Hasn't really been able also to get past that february 2nd blow off top Um, again when we look at the chart from a technical perspective at least You can see what appears to be a rising wedge that's formed even with a bump and run So amazon on a couple occasions now is attempted to break above this upper trend line But hasn't been able to do so. So this is an important spot for amazon because again, this happens to be, uh, you know Again because this happens to be a rather bearish pattern And would actually suggest that maybe amazon pulls back over the short term Falling results perhaps back to around 100 or so, which would take it back to this lower trend line Clearly a break of 100 would potentially set the stock up for a further decline to around 97 dollars or so