Today's action was about as lethargic as we expected it to be, with many traders not even bothering to start something they knew they'd have to stop in the middle of the day. We'll still have a full trading day on Friday, though we don't look for it to be a particularly busy day either unless we got some wild new jobs number from the Department of Labor. On that note... You probably already heard the ADP employment change report, but if not, the payroll company says 188,000 new jobs were created in June. That's way better than the 150,000 economists were expecting, but it's still not the whole story. We'd still like to hear from the DOL to see if its number jives with the strong ADP number. We'll wait until we get that data on Friday before taking a closer look at any of it for you. Today we'll go ahead and serve up the Q2 earnings preview. Q2 Earnings Aren't the Big Story Here Yep, it's here - earnings season for the second quarter kicks off on Monday (the 8th) with Alcoa's (AA) report. There are only a handful of other earnings announcement in the lineup for the next week, but the following week puts us right into the thick of it. We'll try to cover as many of the relevant updates as we can, but quality over quantity, you know? Anyway, as of June 28th, Standard & Poor's says the S&P 500 is likely to earn $26.40 for Q2. That's 3.8% better than Q2-2012's bottom line, and a bit behind the growth pace of 6.3% the index logged in Q1. My take: I'd be surprised if the market didn't collectively beat, let alone meet, second quarter expectations. On the other hand, last quarter's results may well be the least important aspect of the news we're about to get. If there was ever a time to keep mental tabs on guidance - for Q3 and Q4 in particular - this is it. The S&P 500 is already priced at a fairly frothy 16.44 times its trailing income, largely based on hopes that the big targets for the second half of the year would be hit. That's fine if the S&P 500's companies end up meeting those targets. But, the growth expectations are alarmingly high. Just for reference, S&P currently expects the S&P 500 to earn $27.65 for the third quarter of this year, and $29.34 for the fourth quarter. That would represent 15% year-over-year growth and 26.7% year-over-year-growth, respectively. I know the economy's been decent of late, but I honestly have a tough time seeing what's (besides more stock buybacks) going to drive that kind of growth. If companies and analysts don't see it either once we start to get some earnings and guidance news, those earnings forecasts are going to start getting dialed down. The market's going to hate it too, and shed stocks in protest. I don't want to be the guy that rattles your convictions; if you think the market can crank out that kind of earnings growth in the second half of the year, do what you gotta do. I'm just saying I don't see earnings growing faster than they have in years while unemployment is still anemic and the Fed is clearly looking for a way to bring its QE efforts to a close. We'll be updating the earnings saga for you as it gets told. The Bulls Light Some Early Fireworks Meh. As it turns out, we really could have skipped today's trading session. The market closed a tad higher, but volume was ultra-thin. We're no better (or no worse) off than we were at the end of Tuesday, or even at the end of last week for that matter. Still, everything matters, so let's at least check in. Though it put up a good fight, today's buying wasn't strong enough to carry the S&P 500 - nor the Dow Jones Industrial Average - above the 20-day moving average line that's been nagging it since late last week. You can be as bullish as you want to be, but until we can hurdle this clearly simply ceiling, stocks are going nowhere. [Isn't it funny how the simplest indicators can end up being so important?] It's unlikely we'll see any significant changes for the market on Friday, and even if for some reason the indices can close above their 20-day moving average lines, take it with a grain of salt. At this point the S&P 500 will also need to fight its way above the 50-day moving average line (purple) to really impress me and inspire a new wave of buying. If it happens to make a close under, oh, 1600 or so before it makes that bullish progress, odds are good that will deflate any lingering bullish hopes we still have left and put us back on the path to a bigger correction. It's largely going to depend on what the Department of Labor says Friday morning. You know what though? That's something that's not going to matter until Friday, and really not even until Monday. What's important now is that we're (assuming you're here in the United States) getting ready to celebrate Independence Day. However it is you're going to do so, focus on that for the next day and a half. We get to trade about 250 days a year, but we only get to have barbecues and watch fireworks once a year. Have a good one.