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Markets Facing Difficult Days Over Earnings

Vague rumors are again moving markets today. Europe is weak (down 5 percent) on concerns of additional losses from major banks, as well as the failure of Europe to cut rates.

Thank you, Apple , because you have reminded us of something the bears keep bringing up: that we are faced with three weeks of potentially difficult earnings guidance.

You can see it today with Motorola , which gave "kitchen sink" guidance for the first quarter: we were expecting a 9 cents gain, they said they would have a loss and that the recovery in mobile devices would take longer than expected. Sees losing market share. Down 11 percent pre-open. Nokia also weak on concerns of slowdown.

You can see it with Coach . They did OK for the quarter just ending, and essentially affirmed full year 2008 estimates.But Coach used to have a tradition of beating and raising; now we have to settle for status quo at best.

You can see it with Suntrust , which missed and reported losses of $510 million in money markets.

Bears also believe that rate cuts will fail to stabilize markets, and there will be no leadership because of a drawn out process with financials, and tech expectations taken down

For the bulls, a lot of things have to go right:

--Europe cuts rates
--Fed cuts 50 bp next week
--Bond insurers stabilize/rescued
--Energy, financials re-emerge as leaders
--Insider buying picks up
--Investment outflows stabilize

The biggest advantage the bulls have is the already oversold conditions.

So where do we go from here? One trader noted yesterday that we have entered a new trench war of data points and news flow on the dangers of recession vs. rate cuts and stimulus.

Questions? Comments? tradertalk@cnbc.com

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