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.

The more things change, the more they stay the same - sentiment is at a low, fundamentals have softened, and technicals have held. We have key lines to direct us, but Technology's vulnerability here may be the key.

We already knew sentiment had dropped significantly, but while the stock market has been consolidating of late, the technicals have modestly strengthened while the fundaments have softened more.

The swift decline in investor sentiment suggests a buying opportunity, but overall sentiment has not reached the extreme many believe... leaving flat fundamental data as the deciding factor from here