Well folks, the first week of Q2 earnings season is in the books, and despite Friday's lethargic session, it was a bullish week overall. The S&P 500 managed to close about 2.6% higher than the prior week's close. Yet the market's still on the fence. We'll take a look at how and why in a second. There's a handful of other items we need to dissect first. In the interest of time (mainly yours'), let's just dive in and work through them in rapid-fire fashion. Earnings Check-In Technically it started Monday, but earnings season doesn't start in earnest until next week. We've got 64 of the S&P 500's constituents scheduled to release their quarterly results in the coming week, and a whole slew of them are bank stocks. Bryan Murphy gave us a preview of some of the harder-hitting bank announcements in the lineup. If you want to see the whole calendar though, here it is. Anyway, the marketwide earnings outlook hasn't changed much since our last look on July 3rd. The folks at Standard & Poor's were expecting the index to earn $26.40 for the second quarter, and now (as of the 9th) that total is $26.39. Same-same as far as we're concerned. It's still nearly 3.8% better than the year-ago number. Of the twenty-six S&P 500 constituents that have reported second quarter's numbers so far, sixteen (61%) have topped estimates, and eight (30%) missed earnings forecasts. That's a noticeably worse beat/miss ratio than usual, but then again, twenty-six companies isn't much of a sample. Again, I don't think the numbers for Q2 are going to be nearly as important as the guidance these companies provide with their prior quarterly results. The pros are still calling for 15% growth in third quarter numbers, and 27% growth in fourth quarter's year-over-year income. Anything's possible, but those are alarmingly-enthusiastic outlooks that may be setups for disappointment.... and you know what the market does when it's disappointed. Speaking of, Yahoo! Finance's Breakout had some interesting stats about how expectations were being dialed down, lowering the bar for Q2 numbers. The interviewee John Butters particularly noted that the financial sector was the only sector was the only one that recently saw upped earnings expectations. Had it not been for the financial sector, in fact, the market's overall growth expectations for the second quarter would actually be a decline of 2.5%. If bullishness on financials rings a bell, it may be because we named the sector as one of the top must-have holdings for Q3 back on the 10th. [It was a total coincidence Butters was impressed by the financial sector at the same time we were, but not surprising - the data doesn't change from one analyst to the next.] Or, if you're more of just-a-video-watcher, I think CNBC had some eye-opening data on recent downward guidance. Loose Ends Were you listening - and acting - back on July 8th when we introduced you to CryoLife (CRY)? Hope so. Assuming you got into a position at the next day's open of $6.44, you're now up about 11%. That ain't too shabby for a week's work. What happened? Well, earnings buzz for one thing. But, CRY also won FDA approval for a new laser surgery system. We told you the company was building a larger and more marketable product base, and in the meantime, CryoLife proved it. As tempting as it may be to go ahead and lock in a gain (especially now that the chart looks overbought). I don't think that's the right move with CRY. I suspect we'll get a pullback, but only a short-term one. The longer-term breakout's been brewing for years, and this week's pop hardly empties the tank. Once we get a decent dip, I'm looking for the uptrend to renew itself. It's still just a trade though. The only other recent trade we've put on the table is Northwest Pipe (NWPX), from June 28th. It's up about 9% since then, and even though NWPX has stalled this week, we still like it as a short-term trade that could become a long-term position. The recently-posted Water Infrastructure report card (from American Society of Civil Engineers) details why we're more than willing to stick with it indefinitely. There's another idea we suggested a while back that we haven't looked at of late, which has caused some of you to ask us about it - JC Penney (JCP). Yes, we still like that one too; the reasons we cited way back on April 9th are still 100% valid. Oh, we're well aware JC Penney shares have fallen off their May highs. Doesn't matter. It could (and should) take two or three more swings to develop some long-lasting technical momentum from stock, during which time the new CEO can restore the investor community's faith in the company. Well, it's happening. It's happening at a snail's pace, but it's happening. It was a long-term pick to begin with anyway, and we're going to give it the time it needs. If there are any other ideas we've given you recently that we haven't taken a fresh look at, let us know which ones you've got on your mind. If I'm not mistaken though, NWPX, CRY, and JCP were the only specific companies we've got a hypothetical trade on at this point. By the way, if the SmallCap Network's three trading ideas for the year aren't enough picks for you, try the SmallCap Network Elite Opportunity. You'll get way more picks (and a heck of a lot more follow-up). Here's a special offer for SCN readers. Or, copy and paste the following link in your browser: http://www.smallcapnetwork.com/?vmpd_ckstr[click_track]=SCN+Newsletter&vmpd_ckstr_redirect=/pages/SCNEO/v1/ Market On the Verge, But... To tell you the truth, I'm a little surprised the market was even able to hold the line today. I figured after yesterday's - and this week's - explosive gains that all the recent buyers would want to lock in gains while they could before the weekend. Instead, folks were content to just sit tight and wait for whatever Monday may hold. That's a little bullish in itself. I still say the market's overbought and due for a pullback... just a near-term one. But, there's no meaningful evidence yet to support my theory. Translation: It would be no more wrong to bet on the market than against it here. If for some reason the S&P 500 can make another gain on Monday and close above its upper Bollinger band (which would also likely mean a new all-time high), I suspect traders will temporarily forget how overbought we are and spur stocks upward for at least a few days. If it rings a bell, it's part of the same chat I had with you yesterday. You can just check out the full bullish and bearish arguments and charts for yourself in yesterday's newsletter, since they all still apply. Your marching orders from here: Go enjoy the weekend; play golf, or do whatever you do for fun. Most of us seem due for decent weather. Check back Monday for the latest on how this overbought market is dealing with said condition. We're still at the inflection point, and could easily go either way.