The employment numbers came in as expected and is favorable for the Consumer Discretionary, which will begin reporting earnings in the coming weeks and are consolidating ahead of the news.

Earnings surprises for the month of October are running at a 20-year high and, if you take out the UAW-GM strike, employment data appear to have bounced back strongly during the month (but Friday's employment report will include the strike).

The two main conflicting stories in the stock market are continuing to build their cases, but for now, price action wins.

The stock market continues to consolidate going into earnings season as the battle between technicals and fundamentals plays out.

It is a week before earnings season and a lot can still change, but earnings estimates are trending lower with room to go lower still.

Earnings have started to roll over as we near earnings season, but for now, the stock market is oversold at a support level as employment data picks up ahead of the payroll report on Friday.

Likely more of the same from the macroeconomic data, which is turning into a positive against market sentiment. Plus, the recent strength in the market is skewed towards stocks with the best earnings, and that is a positive going forward.

A tick higher in Industrial Production is expected, which is supportive of stock prices and earnings for the quarter, as breadth strengths with the S&P 500 above support.

The break to the upside in the consolidation over the past month, which took the S&P 500 above the key resistance area, outweighs the lagging employment data that came in below estimates.

There are downside risks to payrolls on Friday, and that could be the catalyst to push stocks out of the tightening consolidation range.