Big tech earnings will kick off when Netflix Inc (NASDAQ:NFLX) prints its third-quarter 2021 results on Oct. 19. The SPDR S&P 500 (NYSE:SPY) is garnering strength for a run-up into the earnings season or for a run as the biggest companies within the ETF report over the coming weeks.

The general markets were weakened over the month of September and the beginning of October as wary investors grappled with concerns over key employment numbers, potential talk of tapering and a standstill in the Senate over government funding and the debt ceiling limit.

So far, the Federal Reserve has held off on changing its monetary policy amid poor jobs numbers and on Thursday the Senate passed a short-term bill to extend the debt ceiling through to Dec. 3. Risk remains, however, and over the weekend Treasury Secretary Janet Yellen warned of a "catastrophe," which could result in a recession or financial crisis could be in the cards if a longer-term deal can’t be reached.

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The SPY Chart: On Sept. 8, the SPY broke down from an ascending trendline that had been guiding it upwards since March 5. Since the date, every time the SPY broke below the trendline it bounced from a second lower ascending trendline, but on Sept. 17 the SPY lost support of the lower trendline as well.

The break of the trendlines set the SPY into a solid downtrend, making consistent lower highs and lower lows. On Oct. 7, the SPY gapped up and the open and looked as though it may buck the downtrend but put in a lower high at $441.80. Since then, the SPY has fallen lower but has yet to put in a lower low under the $426 level.

The SPY is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The 200-day simple moving average is trending below the SPY, however, which indicates overall sentiment remains bullish.

• For bullish traders "the trend is your friend" (until it’s not) and patience may be needed. Bullish traders will want to watch for either the SPY to buck the downtrend by making a higher high, a double bottom to occur at the most recent low or for the SPY to tighten into a triangle.
• Bearish traders can continue to follow the downtrend and watch for reversal candlesticks to indicate the likelihood of the lower highs and lower lows printing.