Company earnings already begin to disappoint

It’s the first heavy week of earnings season with nearly half of the Dow Jones Industrial Average and more than one-fifth of the S&P 500 set to report. Investors may have already seen enough.

The S&P 500 failed to break through key resistance at 1100 as earnings season began last week with the likes of Alcoa, General Electric, Intel and Bank of America reporting. While just 22 members of the index provided results, a broad enough mix from each sector was represented for investors to get a bad feeling about what’s coming next.

Mary Ann Bartels, Bank of America Merrill Lynch’s technical research analyst, points out that last Tuesday, 90 percent of the S&P 500 memebrs increased on volume of 4.9 billion shares. However, on Friday, 90 percent of the index declined with activity at 5.5 billion shares.

"Last week’s 90 percent up day failed to clear the 1100 area resistance and Friday’s 90 percent down day has the potential to solidify that area as short-term resistance," wrote Bartels, one of the few chart analysts left at a major bank because of her wide following. "Higher average volume for 90 percent down days supports the bearish case."

Technical analysts look at extreme behavior in price movements and volume to gauge sentiment. Many such analysts have left the big firms to sell their research at smaller shops.

Halliburton kicked this week off on the right foot as the shares jumped after revenues exceeded analysts estimates. The companies left to report this week are not faring as well. Apple shares continue to be under pressure ahead of its report Tuesday. When Apple, literally the most loved company on Wall Street by analysts, can’t get momentum going before earnings, there may be little hope for the market to do so.

“The S&P 500 ran into some trouble at the 1100 area, which corresponded with its downward-slopping 200-day moving average,” wrote John Roque, analyst at WJB Capital Group. Chart analysts look at long-term averages to measure trends.

The failure to break out during earnings may not even be in the companies’ hands. Both Bartels and Roque cited the breakdown in the 10-year Treasury yield below 3 percent as a sign that investors are fearful of a domestic economic slowdown, whether companies are forecasting it or not.

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John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team