Good hump-day, one and all. Well, the market once again hedged its bet as much as possible, staying squarely in between a rock and a hard place at a point when we explicitly need it outside of that narrow range. Ugh. We'll talk about it all, of course, and a couple of other things. But first, a quick tribute to say goodbye to one of the world's greatest creators of tips and observations that unintendedly turned into cliches. Oh, he was a pretty darn good baseball player too. He Said What? Most of you already know I'm talking about baseball hall-of-famer Yogi Berra, who hit 358 homeruns over the span of 19 years, hitting an average of 0.285 for his career. He died yesterday morning, at the age of 90. While his numbers weren't completely earth-shattering by modern or historical professional baseball standards, any player would be proud to put up those kinds of results for as long as Berra did. It wasn't his stats that made Berra so special to America, though. It was the things he said, many of which not only didn't come out the right way, but came out in a wrong way that was just a lot of fun (and he had as much fun laughing at himself as anyone else did). Among my favorites: "Half the lies they tell about me aren't true." "You should always go to other people's funerals; otherwise, they won't come to yours." "The future ain't what it used to be." Thanks for everything, Yogi. You'll be missed now as much as you were missed off the field then. Here We Go Again I can't believe I'm getting ready to say this, but it's almost time to start Q3's earnings season. Didn't we just recently close the books on second quarter earnings? OK, I don't want to give the impression that third quarter's earnings season is just minutes away from beginning. The unofficial kickoff will be on or around October 8th, when Alcoa (AA) is slated to unveil its prior quarter's results. That's only two weeks away, though, so it's not too soon to be thinking about it. We'll be fleshing out all the details as earnings season begins to roll in earnest. For now we just wanted to paint with some broad brush strokes, showing you what's expected for Q3 with and without oil stocks dragging the whole market down with it. First and foremost, here's the progression - lower - of earnings estimates for Q3. As of the most recent look, the pros say the S&P 500 is likely to post per-share income of $28.74. That's more than just a tad less than the index's bottom line for the third quarter of 2014. In fact, it's 2.9% less than the $29.60 the S&P 500 earned in Q3-2014. It's also considerably less than the $32.01 analysts were expecting for Q3-2015 just six months ago... analysts who were likely expecting oil to rebound by then, and analysts who weren't expecting the U.S. dollar to skyrocket. And yes, you CAN mostly blame oil/energy for the market's looming earnings stumble. Taking their dip out of the equation, the S&P 500 would be more likely to see earnings growth of 4.9% in the coming quarter. That's not bad, especially considering the comparison is to a rather high bar set in the third quarter of 2014 when the economy was firing on all cylinders. Now, we showed you all the data above to set the stage for the data we're going to show you below. While it's the energy sector's fault earnings are due to be crimped, energy stocks still make up about a tenth of the S&P 500's constituents, and we still have to factor them in - with their tepid earnings - into the market's overall valuation. In theory and practice, the index should be "self-adjusting". Well, read 'em and weep. Based on the lowered earnings estimates for the energy sector and factoring in the lower prices these stocks are now at based on those earnings estimates, the S&P 500 is now valued at a trailing P/E of 18.1 and a forward-looking P/E of 15.5. That's a valuation based on the assumption that the S&P 500 will indeed earn $28.74 for Q3. The forward-looking P/E ratio of 15.5 also assumes earnings will grow by an average of 17% between Q4 of this year and Q3 of next year, which is possible IF oil prices rebound. It will ONLY be possible of oil prices recover, though. I know, I know... me and my silly valuation shtick. Don't I know that valuations don't matter? Don't I know the only thing that matters is growth? Yeah, I know.... I know valuations don't matter, right up until the point they do. And once they do matter again, they have a funny way of mattering in spades. I don't know what the "right" valuation for stocks is. I do know, however, stocks got stuck under a ceiling once the trailing P/E just passed a tad above 18.0 this year. That's also been a historical extreme high for valuations. If you think you know what the maximum valuation stocks can take is, here's a handy-dandy updated chart of all the possible scenarios based on Q3's earnings estimates. These valuation scenarios help put our technical discussion of the market in a much stronger context. The Walls Are Closing In Hmmm. Not a lot going on today. It's not entirely surprising. Investors just don't know what to think or do here, so they're doing very little. When all was said and done on Wednesday, the S&P 500 closed a mere 0.2% lower, but more than that, it didn't even attempt to test any of its key technical floors or ceilings. The lack of movement didn't abate the effects of the passage of time, though, and this presents something of a conundrum for us all in light of yesterday's message. As a refresher, on Tuesday we simply explained how although we'd prefer to see the broad market go ahead and dish out a big capitulatory pullback, if it didn't happen by mid-October then it probably wasn't going to happen at all. Well, with one more lethargic day on the books, we have one less day to dish out that dip. Thing is, each day we don't dish out the dip, it becomes technically tougher to do so in the future. Several weeks ago we pointed out how the Bollinger bands can and generally do serve as a ceiling and floor for the market. Well, it's time to reprise that premise. Thanks to the S&P 500's lack of movement since early this month, the upper Bollinger band is bearing down fast (currently at 2002) while the lower Bollinger band now rests at 1914. That's not a lot of room. Take a look. Just so there's no misunderstanding, if we see volatility increase from here, those bands will start to widen. It's like anything else though... once the wall is in place, it's tougher to move. The bears as well as the bulls would have been much better off just never letting the walls close in in the first place. As for what it means to us in the grand scheme of things, it just makes handicapping the market a much messier affair. I'm not even going to bother showing you the daily chart of the NASDAQ, nor are we going to show you either weekly chart - there's just no point. Stocks have gone stagnant here, and my fear is, the more stagnant they go, the more stagnant they get. We could end up getting stuck in this narrow range for two or three weeks without a decent catalyst. The good news is, I firmly believe there's a catalyst in the hopper - a government shutdown come October 1st, driven by DC's lawmakers' inability and unwillingness to come to a consensus. We'll see. Be patient.... .... or, don't be patient. It depends. I know the desire is to wait for a clear, big-time bottom before wading into new stock trades, whether they're short-term or long-term positions. Just for the record, however, Elite Opportunity members were given a long-term trading suggestion today. I get it. It's easy to be penny-wise and pound-foolish, so rather than bicker over just few dollars, John Monroe went ahead and pulled the trigger on a new pick today, as this stock itself looks like it's already made a major bottom even if the market hasn't yet. If you've been looking to reload our portfolio and finish the year strong even if the market doesn't, I don't think you can go wrong with the Elite Opportunity service. I know my portfolio has been well served by me being a member. Here's all you have to do to join, or simply cut and paste this link into your browser: https://www.smallcapnetwork.com/pages/SCNEO/v1/