Happy hump-day, one and all. And what a Wednesday it was! Stocks started in the red but got pretty deep into positive territory by mid-day. The bears struck back after lunch, but by the time the closing bell rang, the bulls had pushed back to hammer out a decent gain of 0.5%. Still, with stocks remaining below some key technical resistance despite testing it this afternoon, it's not like we can afford to get too excited. Just consider today another piece of evidence that traders on both sides of the table lack conviction, which makes for a lousy trading environment. Oh, if you're a true day-trader or scalp trader and are watching intraday charts likes a hawk, then this environment is fine. For the bulk of us, though, the fact that the S&P 500 is back where it was in mid-November is more than a tad annoying. We need bigger movement to make it (trading) worth our while. Don't worry though.... we'll get it soon enough. We're going to give you our usual market dissection in a moment. The first thing we want to get out of the way today is a follow-on to yesterday's newsletter which just happens to be a fitting response to some feedback we got from a reader regarding yesterday's edition. Change Happens In An Instant I know we've mentioned this to you several times of late, but we can't say it enough - we read every piece of feedback and every e-mail you guys send us, and we think about it in-depth. We respond when merited, and we respond right here in the newsletter when it makes sense to do so. Well, we got one of those notes last night. Rob writes: I like it when you talk about the quarterly earnings and compare it to various things. I find that other news sources just concentrate on comparing to earnings expectations (which we do not know when they were last revised) so I appreciate your dissection of this data. Thanks Bob. We agree that most other media outlets fail to paint the bigger picture most of the time, which is why we make the point of doing so as often as we do. We know it can be a little overwhelming and sometimes seem off-point, but I'm telling you, it's the little details most other investors ignore that matter big-time to your portfolio. Anyway, you mentioned earnings estimate revisions, which was something we were going to bring up later in the week. But, before yesterday's newsletter becomes little more than a fading memory, we thought we'd go ahead and point out something else quite alarming... how the total 2015 earnings estimates for the S&P 500 were revised lower - sharply - over the past two weeks. Rather than the $130.99 per share Standard & Poor's was expecting the S&P 500 to earn in 2015 less than a month ago, now Standard & Poor's is looking for the S&P 500 to only earn $122.74 this year. That's a 6.3% dip in the projected earnings total. Take a look. As for what this means to you, it exacerbates the valuation problem I spent the better part of late-2014 lamenting. Instead of the forward-looking P/E of 15.74 we were talking about just three weeks ago, now we're looking at a forward-looking P/E of 16.5. The projected P/E of 15.74 was bad enough, but the forward-looking valuation of 16.5 is downright dangerous. I'm not accusing Standard & Poor's of being sloppy or deceptive. They're just guessing like everybody else, and they have no legal obligation to update their outlooks in what we would consider a fair and timely manner. The thing is, it doesn't matter. As of the end of December most investors were thinking one thing, and as of today they're going to have to start thinking another. The really frustrating part about the current outlook is, as nasty as the contracted outlook feels, history says we can expect the earnings projection to be reeled in even more as time moves on. Yikes. If you're wondering why nobody warned you of this sooner, well, just for the record, your friends at the SmallCap Network did warn you this was apt to happen. The last time we did so was back in the November 13th edition of the newsletter, when the 2015's earnings projection was an attractive $133.92. My how things change. It just goes to show you, it pays to read the free newsletter every day. Anyway, we mentioned to you yesterday we had a sector-based earnings outlook in the works for you to round out this week's earnings analysis. After a great deal of internal discussion though, we've decided to reserve that chat and analysis exclusively for our Elite Opportunity members in their Friday newsletter. Sorry, but we know how valuable it's going to be, and we have to be sure we're keeping the commentary and research for that premium service at premium levels. Of course, if you still wanted our sector and sector earnings outlook, you could sign up for the EO newsletter. Not only would you receive Friday's sector analysis, but you'd also get any new stock picks - in real time - while you're a subscriber plus access to all previous newsletters. One good tip, pick, or data nugget found in the Elite Opportunity could more than cover your subscription cost, so don't delay - sign up today. Here's how to join the EO club, or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ It's Still Not Enough Yeah, stocks may have logged a third day of gains today, but you know what? We still haven't cleared the big hurdles. For the S&P 500, that's 2045. What's more, while the market may have been up firmly on Wednesday, it's interesting - as in suspicious - how the volume is weakening on the way up. We're not going to even look at the S&P 500 chart today, however, as I think the NASDAQ is where the real telling story is. Take a look. Though it too closed higher, it didn't do as well as the S&P 500 did. It also looks like the bulls hesitated a little as the ceiling at 4700 was approached.... a huge red flag in my book, signaling the lack of conviction we discussed above. That's not to say the bears have a firm grip here either, because they don't. The bears won't have an edge until the NASDAQ breaks below 4542 and really gives investors something to worry about. All the same, I continue to think a more significant pullback is in the cards, and I got another piece of supporting evidence today. That evidence is the Russell 2000, which not only lagged the rest of the market today, but ended up closing in the red by 0.34% after bumping into a ceiling at its 50-day moving average line yesterday. It's a concern, because if the market really is in rally mode, it should be led by small caps and the NASDAQ. The action we're seeing today suggests a bias for safety. It was still bullish on Wednesday, but it doesn't say investors are thinking confidently about near-term upside. It's only a matter of time before they trade accordingly. I know it's not what you want to hear, but for those of you who aren't pure day-traders and are looking for bigger moves, there's not one on the horizon yet. Stay tuned though, 'cause that could change in an instant.