Alcoakicks off earnings season tonight. How are stocks positioned on a technical and fundamental level?
On a technical level, stocks were overbought going into the New Year, but more than a week of grinding sideways is helping correct that.
Fundamentally, we still look in good shape: the S&P 500 is trading at about 13.5 times 2011 earnings. Average earnings estimate for the S&P 500 is about $93. At an average multiple of 15, that leaves room for the S&P to move to about 1,400, a roughly 10 percent move. Not surprisingly, that is exactly where many strategists have their price target: about 1,400.