So how do we play the earnings picture this quarter? Goldman Sachs Group Inc (GS.N) rose 2.2 percent as buyers materialized after an early selloff on news the investment bank’s quarterly earnings tumbled 82 percent, steeper than forecast. Bad news was already priced in. Stock could extend gains for a third straight day as futures rose after Apple Inc (AAPL.O) reported results that surpassed Wall Street’s forecasts. Shares of Apple, maker of the iPhone and iPad, gained 3.2 percent to $260 in extended-hours trading. However revenue misses are being punished !!! International Business Machines Corp (IBM.N) fell 2.5 percent to $126.55 a day after reporting quarterly revenues missed estimates as new technology services contracts declined. IBM, the world’s biggest technology services company, was the top drag on the Dow. Texas Instruments Inc (TXN.N) also missed revenue expectations due to weaker-than-expected orders from one mobile phone customer, and shares of the chipmaker dropped 3 percent to $24.78. In after-hours trading, Internet company Yahoo Inc (YHOO.O) dropped 6.3 percent to $14.25 after net revenue fell short of Wall Street expectations.

So what is the pattern developing relative to the economic situation we find ourselves in this quarter? The general theme has not changed, companies continue to cost cut and beat a bit the bottom line. Any growth seen is from emerging markets, but its becoming clear there is no top line growth from western economies yet again – and of course these elusive jobs are no where to be found. Patience is running thin, so yes the market might run up a bit on a few good numbers, but once again this economy is going nowhere because we refuse to understand the structural realities of what will get this economy going again.

We are not suffering enough pain or have the political will to change, yet. Will the politics solve these structural issues and make it worse? My guess is the tea party people are coming to Washington and their ideas will take us on the final leg down – if they get it in that is. I am not sure they can really win as the Republican party leaders are walking a fine line in getting their support but no really supporting them – they are being played as suckers.

So the market is like a boat drifting and run a ground – continued sideways for now …

Market view: