Welcome back from the weekend, everybody, and be sure to buckle up. Although earnings season technically began two weeks ago, this is the week we get waist-deep into Q1's results. If earnings are going to shake the market out of its rut (more on this below), this is the week it could start to happen in earnest. With all of that being said, while the bulk of earnings season is still in front of us, we do have our first update on earnings season so far. And, it's an encouraging one. You may recall before earnings season started how analysts were collectively calling for the S&P 500 to earn $26.74 in the first quarter. In the meantime the number has been bumped up to $26.94. Don't get too excited just yet, as we've only got earnings reports from about 12% of the S&P 500's constituents - a lot could still go wrong with the remaining 88% of the index's names. It's a great start though. Another reason not to get excited: While Q1's actuals so far have topped estimates, all of the forward-looking earnings estimates have been reeled in. If the idea of falling forward-looking estimates rings a bell, it may be because I've warned you it happens most of the time,usually without investors even realizing it's happening. It's a big deal though, as the contraction of future earnings estimates means stocks gradually become more and more expensive, pushing their risk/reward ratios to increasingly unattractive levels. How bad has it gotten already? It's not horrifying. The projected 2015 P/E ratio for the S&P 500 was 17.6 before the latest update from Standard & Poor's, and now it's 17.8. As our chart of all the revisions shows, however, these revisions can become pretty dramatic in just a little bit of time. For what it's worth (which isn't a whole lot just yet), here's the beat/miss breakdown at the sector level along with Q1's current earnings growth projections for those same sectors. While this is interesting information and will be very telling eventually, there's just not a big enough sample to worry about it yet. We just wanted to show it to you to whet your appetite for some detailed sector stuff we're going to be doing in the near future once we get more data. Last, though probably foremost, is a look at our updated trend chart of the S&P 500, its earnings, and its P/E ratios (trailing and projected). Even with the downward revisions there's still a clear - and uncharacteristic - rekindling of earnings growth expected in 2016 despite the acknowledged lull coming in 2015's bottom line. A falling dollar really could help. I don't know that a weaker dollar would drive the near-14% improvement expected for earnings in 2016. but it would definitely help. Thing is, I'm not so sure a major tumble in the value of the greenback is in the cards. See, higher interest rates - generally speaking - should apply upward pressure on the value of our currency. While I suspect a lot of the dollar's current value was driven in anticipation of higher interest rates that are now going to take a little longer to materialize, higher rates ARE coming. Ergo, though the greenback may not have a lot of room for further upside, the process of pushing rates higher should at least provide some sort of bigger-picture floor for the value of the dollar. Sure, we'll see bearish swings from the greenback, but I don't see a monster-sized slide anywhere on the horizon unless other currencies increase in value.... and I don't see that happening anytime soon either, especially here in the latter phases of an economic expansion. I guess that's the long way of saying I still have doubts about 2016 earnings being leaps and bounds better than 2015's expected bottom lines. You know what though? This is all a bigger-picture premise that doesn't have much of an impact on the market's near-term gyrations. Let's dive into the daily charts to get a feel for where things may be going for the next several days. Keep reading for the near-term outlook. From the Site Holy cow - there was a lot of stuff posted at the website today. And, all of it was good. Not to inundate you, but here are five items you really should take some time to check out. Small Cap Angie's List (ANGI) Earnings Report: A Bad Review? YELP & TRIP Small Cap Stocks Ready for a Bounce? Wix.Com is Well-Positioned for More Upside (WIX, WWWW, GDDY) ON THE MARKET - "Sell in May and Go Away?" 22nd Century Group Finally Spurred Into Motion. Where to From Here? (XXII) I've mentioned this before, but it bears repeating now... if you're not visiting the website every single trading day, you're missing out on a lot of great insight and actionable ideas. Be sure to bookmark the SmallCap Network site and pop in at least daily. Here We Go Again It's days like today (not to mention months like the last two months) that make me wish this was actually a video newsletter or a face-to-face chat rather than written a newsletter, just because there are some opinions, responses, and emotions mere words don't do justice. Had you been sitting across from me on Monday, for the better part of the day you would have seen me rolling my eyes, shaking my head, and sighing in response to just how indecisive and tractionless the market has become. We've seen go-nowhere environments before, and they're equally annoying. They never get any easier to wait out, however. The daily chart of the S&P 500 tells the tale. The index pushed up and off of its 20/50-day moving average lines today, quelling the downtrend that tried to get started on Friday, but not getting the index above the hurdle at 2114 that would signal the onset of another bullish leg. In other words, we're still right in the middle of a narrowing trading range. At this point there's not much reason to not just sit back and wait. The rising support line and the barely-falling resistance line are close to converging, which should force everyone's hand. And, while I know the current scenario looks bullish at first glance, I still don't think I'd nibble on that bait. We're fast approaching the market's most lethargic time of year anyway, and we're entering this period already in an overbought condition. Besides, today's volume behind a heroic move higher was rather anemic. Where are all the buyers? This is nothing more than a lack of sellers. (Never even mind the fact that rising pennant patterns like the one we're making tend to result in a pullback when made in the situation we're in now.) I know this is getting old. It's getting old for me too. Even our usual solution for a stagnant market - focusing on hot sectors and industries - hasn't helped a great deal to overcome this funk. Don't get too distracted or discouraged though, as I think we're close to breaking out of this rut... for better or worse. Speaking of sectors, we're going to be taking a bigger-picture look at sectors and styles as we continue to walk into the latter phase of an economic expansion. Although this type of analysis doesn't help a whole lot in the short run, it does help in the long run. We'll get it before the end of the week. That's it for today. We'll be back at it on Tuesday.