Earnings season is when new growth stocks come to the attention of the market
Everyone is watching head and shoulder formation (even though classic definition of head and shoulder has volume component to it) and so people are expecting more downside.
There is steady increase in bearish news and the usual suspects who declare market is going to fall 50% plus every year are all over the place peddling doomsday scenarios.
That is one way to look at the market. There is another way to look at the market also.
The rally from March 10th to June was a very swift move and now is undergoing a correction.
The first phase of the rally was lead by junk and oversold stocks. The primary driver of the rally was the realisation that things were not as bad as the market was pricing in.
The panic phase of the market had driven many companies to implied "bankruptcy level price" , that fear was largely contained by coordinated worldwide stimulus package.
After a big bounce market is having a pullback. The pullback can last for months.
Second phase of the market will have growth stocks leading the market. That is typically the historical pattern.
Bull markets are about growth stocks. Earnings season is when new growth stocks come to the attention of the market. So in this earnings season we will again have some completely new, ignored, neglected, unheard of stocks coming out with surprisingly good earnings and market will react to them if there is real surprise. That is the way structurally market behaves and has behaved for 100 year.