Equities rebounded last week but the move did not get far. The S&P 500 hit resistance at the 3,800 level giving another technical confirmation that this sell-off is not over. Not only is the outlook for earnings in decline but the inflationary pressures and systemic challenges causing them are still present as well. This has the FOMC on track to continue raising rates and possibly spark a major recession in the economy.

This week's news will be twofold. On the one hand, we will be getting another read on CPI and it should be a hot one. On the other hand, the earnings season is about to get underway and there are many risks for the market. The banks should do well because they can make money from rising interest rates, the risk is that other S&P 500 sectors will fare less well and so far the indications are pointing in that direction. A weaker-than-expected season will help bring the S&P 500 down to a new low, possibly as low as 3,200.