Once again, the fundamental data is expected be supportive of higher stock prices this week and - perhaps surprisingly - market liquidity has continued higher.

Macroeconomic data continues to support stock prices and, despite the Fed's actions this year, liquidity in the stock market continues to rise. Meanwhile, the strength in the market has been in the stocks with the strongest earnings and vice-versa - a positive sign going forward.

Conventional wisdom going into earnings season was that earnings peaked last quarter, but the percentage of positive surprises as well as earnings growth have improved this quarter.

There is upside to consensus estimates to payrolls on Friday, but that is likely bad news, overall, because it supports the Fed’s current path, which will likely be confirmed on Wednesday.

The start of the second quarter earnings season, in terms of earnings and revenue beats, is the strongest of the past 20 years and the fundamentals, sans currencies, continue to trend higher. The percentage of beats relative to whispered expectations doesn’t stand out as much but still the strongest since 2009 at the start of the current bull market.

Liquidity concerns were put on hold to start July and the key macroeconomic data should continue higher, but liquidity should resume providing a headwind as earnings season begins.

A key leading indicator has given a warning sign, but expectations for the upcoming earnings season could be more telling.

The economic data and the continued strong results and guidance given throughout the second quarter are statistically positive as we look out towards earnings season, but the Fed continues to be a headwind.

The Fed went on a mortgage buying spree last week, but the story remains the same.

Liquidity and economic activity are trending in opposite directions and, despite the decades of high correlations, the technicals tell us the economic trends are winning.