Earnings season is picking up and so far the news is mixed early on. Earnings for S&P 500 companies are estimated to fall 5.5% in the first quarter, according to a Reuters Estimates survey. There has been some optimism after positive earnings reports from key bellwether stocks such as JPMorgan Chase & Co. (NYSE/JPM), Intel Corporation (NASDAQ/INTC), and The Coca-Cola Company (NYSE/KO). But the news has not been favorable across the board.

With the price of oil surging to over $115.00 per barrel and with the continued credit and economic concerns, the current investment climate is filled with risk.

The headlines from Thursday morning indicates the nervousness I continue to see in the stock market. In the troubled financial sector, Merrill Lynch & Co., Inc. (NYSE/MER) announced that it would send home about 4,000 workers to help offset over $6.5 billion of new write-downs that caused a loss in the company's first quarter results.

Other headlines on Thursday from Yahoo! included:

"Pfizer 1Q Profit Falls Short of Estimates"

"Harley-Davidson Cuts Outlook to Slash Output"

"Nokia 1Q Profit Misses Estimates"

The disappointing news clearly puts a damper on the market and will probably cap any upside sustainable rally in the near term. In addition, investor sentiment remains weak and, unless we see a shift here, upside moves could be limited and unsustainable. Trading volume also remains below average over the past few weeks, a clear indication of market caution.

I continue to believe that, as an investor and trader, you will need to remain careful in this market, with your focus on capital preservation. Taking big risks could wipe out your capital for trading.

Given the current market conditions, I remain neutral to moderately bearish at this time. Remember the old adage "Bulls Make Money, Bears Make Money, Pigs Get Slaughtered."