[First appeared on Seeking Alpha on July 14, 2012]
The S&P 500 closed the week at 1,357. Once again it covered a lot of ground, but returned to familiar territory. As we explain below, we consider the 1,335-1,360 range on the S&P 500 as neutral territory that indicates indecision. The Q2 earnings season began after the close on Monday when Alcoa (AA) released its results (see our recap here). The S&P 500 then declined most of the week until JPMorgan (JPM) and Wells Fargo (WFC) released earnings on Friday morning and sparked a relief rally. So far, earnings seem to be in line with analysts' much-reduced estimates. The lowering of earnings estimates has likely been priced in, and now the question is whether expectations are low enough to reflect concerns about the slowdowns in the U.S., Europe, and China.