As of Friday, with 23% of S&P 500 components having reported, 78% of the companies have turned in earnings above mean estimates and 65% have beat median sales expectations, according to FactSet.
The broader market could use the help. The S&P 500 moved within a 24-point range all week and is in desperate need of a game changer.
“Short-term momentum has improved slightly week over week and breadth is oversold by some measures, giving next week a bullish bias,” said Katie Stockton, chief technical strategist at BTIG. “However, the election has created some level of uncertainty that could keep the S&P 500 range-bound until mid-November.
The key, said the strategist, is whether the large-cap index can overcome expected selling pressure as it nears its 50-day moving average of 2,160.
“A breakout above it would be a positive short-term technical catalyst,” she said.
The S&P 500 SPX, +0.49% rose 0.4% for the week to close at 2,141.16.
Lee, meanwhile, is predicting a year-end rally after the current headwinds—including the presidential election and the profit recession—resolve in favor of the market.
Downbeat sentiment is also a good sign, said Lee, noting that extreme bearishness is viewed as a contrarian buy signal.
“Sentiment is so bearish [that] it’s bullish,” he said.
The Dow Jones Industrial Average DJIA, +0.49% ended the week mostly flat at 18,145.71 and the tech-laden Nasdaq Composite COMP, +0.86% posted a weekly gain of 0.8% to 5,257.40.