Editor's Note: This was originally posted on the Buzz & Banter. It is being republished here for the benefit of the Minyanville community.


The resilience of this market is a wonder to be experienced. The market gets hit by macro and/or earnings news and it just keeps coming back in a steady inexorable fashion that's just awe-inspiring.

Thus, from a basic technical perspective, I'll repeat what I've been saying for months now -- a constructive stance is warranted.

Fundamentally, I see bullish and bearish forces clashing with roughly equal strength with a momentary edge toward the more positive cyclical forces.

Having said that, last week offered a somewhat mixed bag of fundamental and earnings data. Of interest are the disappointments by Citigroup (C), Bank of America (BAC), and other financials and well as Johnson & Johnson (JNJ), General Electric (GE), and a few others.

However, these high-profile disappointments may be somewhat misleading. Results posted by Google (GOOG) and others have provided plenty of reasons to be hopeful. Indeed, on the aggregate, the earnings beat rate thus far is one of the highest in history. Most importantly, the number of companies raising guidance is off the charts from a historical perspective.

The point of interest is that the first and second quarters were all about broadly and soundly beating overly pessimistic expectations. So far, the preliminary results in the third quarter seem to be indicating that, on the aggregate, ramped up expectations haven't quite yet caught up to a strongly improving reality and outlook.

If earnings results were to become more mixed, I'd expect the parabolic phase of this rally to exhaust itself at around the 1,100 level. This is particularly true if the economic data is mixed.

However, if the great preponderance of earnings and economic news is positive, the market could continue to zoom upward.

I see little risk of a crash in the short-term.

I remain 20% long and 80% cash.