The past week once again solidified our belief that we will maintain a certain trading range going through this earnings season. There have been some surprises to the upside and overall so far, earnings have held up a little better than expected. We don’t see that changing for the next two weeks so the market has found its trading level. We see the Dow trading between 14,300 and 14,700 for the foreseeable future.

This is not to say there isn’t some nice money to be made or that there is no risk in the market right now. We still see some fairly priced stocks that have potential for a nice move come the second half of the year. Unfortunately, we also see geo-political risk that you just can’t predict accurately.

Its times like these that we advise paying attention to your portfolio more than usual and take advantage of those periods of high risk.
This philosophy holds true believing that we will have new highs (inflation adjusted) in the 3rd and 4th quarters of this year. So, if we see a
major pullback, we would advise increasing your positions in the good, solid names in your portfolio.

The coming week will continue with earnings reports with Caterpillar (CAT), Halliburton (HAL), Apple (AAPL), Yum Brands (YUM), Boeing (BA), Exxon Mobil (XOM) and Chevron (CVX) amongst many. The data points we will watch carefully will be the PMI Manufacturing Index, Durable Goods orders, Jobless Claims, GDP for the first quarter and Consumer Sentiment.

Most people will be anticipating the GDP numbers on Friday and we don’t think anyone will be disappointed. Our feeling is that it will come in higher than the 3.1% consensus.