Equity markets held their ground on Tuesday following the 5th consecutive day of decline. The move is promising but not a sign of bottoming so investors are cautioned not to read into it too much. At best, the S&P 500 is making a brief pause on its way back to retest recent lows and those lows could be reached very soon. The risk for investors is the S&P 500 will move below the 3,550 level and open the door to an even bigger decline.

The next major hurdle for the market will be the Q4 earnings reporting season which will begin in mid-January. As it is, analysts are expecting to see S&P 500 earnings shrink more than 2.5% versus last year and the consensus estimate is falling. the risk is that outlook for Q1 and Q2 2023 will take a hit as well and that will bring the S&P 500 down with it.