- Exclusive Interview -

April 12, 2010 (FinancialWire) — In a recent article titled “Looking For Patterns Ahead Of Earnings Season”: (http://www.financialwire.net/2010/04/07/firstalerttm-daily-47-looking-for-patterns-ahead-of-earnings-season/)Dr. Joe Duarte discussed the upcoming earnings season and other topics. The article featured Alcoa (NYSE: AA) and Goldman Sachs (NYSE: GS) .  Financialwire recently followed-up with Dr. Joe.

FW:  Joe. What’s your take on earnings season?

JD:  You know, I’m mostly a chartist, so I pay more attention to how stocks and the markets respond to news, such as earnings. Still, if you look at statistics, and take the pulse of the economy, you have to expect some sort of decent earnings news this time around.

FW:  So you’re positive?

JD:  I think that companies will likely report that things could have been a lot worse.  Some of them may even raise their guidance, or their expectations for future earnings.  The real key, though, is whether the market has already priced that much good news into stock prices.  

FW:   Tell our readers more about that Joe.

JD:  The stock market is a forward-looking entity. Traders place their bets on what they think may happen in the future based on information that they have at the moment. Sometimes they are correct. Other times they aren’t. Sometimes they are partially right, and partially wrong. That’s when you get changes in the market trend.

FW: Do you think that there will be a whole lot of mind changing this earnings season?

JD:  It’s a tough call. If you look at the market, people are betting on a blowout earnings season. I’m basing that conclusion on the very steady trend that we’ve had since the February correction and the overall positive tone in stocks. This market has made a lot of new highs recently. The small stocks are doing well.  And there is lots of worry in the air. Those are the ingredients for a continued advance.

FW: so, why do you seem to be worried?

JD:  I’m just wondering if we’ve come a long way really fast here and maybe some kind of pause lies ahead.

FW: What should investors do if they sense a possible change in the trend?

JD: I am not an investment advisor any more, so I can’t really give advice. There are however some general principles, which will serve all investors well.

FW: Let’s have them, Joe.

JD:  For one thing, people that check their portfolio on a frequent basis, say once per week, will likely catch something that’s not right faster than those who wait for their quarterly statement.  It’s also important to make sure that your holdings are at least following the general trend of the market. For example, if you own five stocks and two mutual funds, and the market is up 10% for the first six months of the year and your stocks are all down while your mutual funds are just about even, there may be something that’s not quite right with your asset allocation or stock picks.

FW: Sure. Investors should be vigilant, and make sure that their portfolio is acting they way they expect it to, or that it follows the general trend of the market.

JD: Even something that simple sounding can make a big difference in the long haul.

FW:  Any final thoughts?

JD:  I would hope that investors keep an eye out for what the Federal Reserve and the bond market do with interest rates in the next few weeks to months.

FW: Why?

JD: If interest rates rise rapidly and aggressively at some point in the future, the stock market could take a big tumble in a hurry.

FW:  That’s why it’s important to check your holdings frequently?

JD: You learn fast (laughs).

FW: Thanks Joe.

More insight and commentary from Dr. Joe Duarte (http://www.joe-duarte.com/), can be found by visiting Dr. Joe Duarte’s “Market I.Q.’ (at http://www.joe-duarte.com/free/order_choices.asp), Duarte’s “Intelligent Forecasts” (at http://www.intelligentforecasts.com), as well as by reading Duarte’s books (available via http://www.amazon.com/), which include “Market Timing For Dummies”, Successful Energy Sector Investing," "Successful Biotech Investing", "Successful Energy Sector Investing” and "After-Hours Trading Made Easy" (co-authored by Duarte).

Dr. Joe Duarte, In addition to regularly contributing to Investrend Weblogs (http://www.investrendweblogs.net/jduarte/), has logged many appearances on CNBC and is a frequent radio guest.  One of CNBC's original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990.  He is a featured columnist on Stockwatch.com. His articles and commentary have been featured on Marketwatch.com, Barron's, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines.  In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.

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