1Q Earnings - A sign of hope

1Q09 earnings are providing a ray of hope.

Earnings are coming in better than expected (no surprise). But the downward revisions are slowing, pointing to a potential bottom in the earnings revision cycle.

This is important, because analyst estimates (which simply mirror management guidance) are generally lagging. And so, much in the same way that analyst estimates are behind the curve on the way up in the earnings/economic cycle, they have been behind the curve on the way down. This playing catch-up, usually meets at the top and the bottom of the earnings cycle.