Wishful thinking will have to be backed up by earnings as we head into 2nd quarter earnings season. The markets have headed higher on the hope that the economy is on the rebound. We have our fingers crossed, but aren’t so sure as we are starting to hear more and more chatter about a 2nd stimulus. The government can’t be happy with the numbers they are seeing and will throw more money into the fire.

We are going to need earnings to provide a stimulus to the indexes. Right now our indicators are looking a bit shaky. The momentum indicator has fallen off the chart like a kicked rock off a bridge. The momentum score needs to be 4 or above for the green light to turn on, it stands at -2.79. Market leadership is still barely in the right hands, but a few down days and it could flip too. And in another sour note, last Friday’s action saw the trend for the indexes turn down at 45 degrees. That kind of u-turn can sometimes point to a reversal.

Futures are also pointing down to start the week, but the good news is indexes should find support fairly quickly. The Dow Jones Industrials should put on the brakes in the 8330-to-8350 range. The NASDAQ should be backstopped around 1780 and the S&P 500 should find support between 890-and-900. From there earnings reports will take over and determine if support levels are just a temporary resting point before takeoff or time to put the seatbelts on for our descent.