Earnings Season Kicks Off With Some Duds

Earnings season began last night with Alcoa's disappointing numbers. Fortunately, Alcoa isn't a big market mover. AMD also warned its revenues would be light, and that is hitting the semis and also hurt Asian markets overnight.

February pending home sales fell -1.9%, more than exepcted. This is weighing on bond yields for the moment, with the 10-year yield near 3.55%.

Oil is still hovering just below the $109 level, and gas here in LA is approaching $4 in some parts. I wonder how this will affect the summer driving season?

The big news is that Wamu (WM) got its capital infusion, and it was bigger than reported yesterday. WM is raising $7 billion and cutting its quarterly dividend to 1 cent from $0.15. So if WM isn't going to fail, it looks like the worst for the bank sector could be behind us as well.

The markets are overbought, so I expect some consolidation. But I want to see the indexes stay above their 50-day averages. The put/call ratio has remained high, indicating there are still few believers in the recent rally.