The stock market is giving signs it wants to head lower while an invisible hand appears to keep it afloat.

Research from Factset Insight notes that companies who beat their earnings expectations are not being rewarded while companies reporting earnings misses are being punished.

Stocks S&P 500 earnings

Companies that reported upside earnings surprises sees declines

Of the 446 companies to report earnings thus far, companies that reported upside earnings surprises have seen a decline of an average of 0.1 percent immediately around their earnings announcements, the report notes.   Companies reporting positive results have been seen immediate negative reactions, but the reaction when a company reports an earnings miss have been more severe.

Companies that report an earnings miss – 27 percent of all those reporting earnings this quarter reported misses – saw their stock value decline 3 percent immediately around the announcement.

Factset Insight studied both the two days before and after an earnings announcement of all companies in the S&P 500, looking at a four day window to establish a benchmark price and then a deviation from that price.

73% of public companies reported positive results

With only a handful of companies left to report earnings, 73 percent of public companies in the S&P 500 have reported positive results, which is slightly ahead of the one year trailing (4 period) average of 72 percent reporting earnings beats.

The companies reporting positive earnings are beating their estimates by delivering results 4.2 percent above expectations. Compare this to the average one year trailing average earnings beat of 3.2 percent. As a result, the report notes that of these upside earnings surprises, the earnings growth rate for the S&P 500 has improved to 8.4% today from 4.9% on June 30.

These are truly spectacular numbers, but after the various corporate announcements the stock market is shrugging off such strong performance.

S&P Aug 11

We’re likely going to get a bounce from oversold levels at this point – and as I have reported previously, the medium and longer term algorithmic trend traders did not largely participate in the recent move lower – this algorithmic inactivity is likely to pick up on the next decline past support, is my individual speculation.