While I’d be happy to be wrong, the first week of a pivotal earnings season makes me think stocks are going to trade lower to sideways over the next few months. The numbers just aren’t strong enough to distract us from the Fed’s ongoing war on inflation.

And nobody really hoped the numbers would be all that strong to begin with. At best, the S&P 500 looked like it had the power to collectively push earnings 3% above last year’s level . . . and now, we’re probably in line to see that growth rate cut in half.

While 1% growth isn’t exactly a reason to dump stocks en masse, it’s hard to see it as a clear buy signal either. Every time the Fed raises interest rates, the drag on the market gets deeper, making it even harder to get excited.

After all, where’s the urgency around grabbing stocks today if the fundamentals aren’t likely to go anywhere thrilling between now and January at the earliest? This is the kind of environment that separates the traders from the long-term investors.

Naturally, we do both around here. The trade flow hasn’t slowed down one bit in this year spent watching the S&P 500 plunge 21% while the NASDAQ drops 31% YTD.

The indices are down. A ghastly 78% of all stocks are down with them. But while investors who only know how to grab dynamic companies early on and hang on throughout the economic cycle are suffering, we’ve used the “dead” time to exploit shorter-term opportunities.

Our trading orientation has been a persistent source of comfort, excitement and liquidity. In my 2-Day Trader framework, for example, we’ve entered and exited 53 separate short-term options positions YTD.

They haven’t all been winners. When you’re making that many trades in a volatile market like this, you’re going to have your share of strikeouts as well as hits . . . but with twice as many of these trades going our way, we’ve squeezed a net 1.37% per trade out of that strategy.

You can do the math. In the aggregate, even a scant 1.37% return per trade is a lot better than sitting passively while your buy-and-hold-forever portfolio is down 20-30%.

I have faith in that portfolio recovering sooner or later and then getting back to work. One day, those buy-and-hold investors will be happy again.

But I just don’t see that happiness spreading this earnings season. While we might see an end-of-year rally, it’s unlikely to take the market as a whole back up more than 5-10%.

At that point, buy-and-hold strategies are still underwater. And that’s a best-case scenario where stocks trade sideways until we get tangible good news on the earnings front . . . if the Fed feeds too much gloom, there’s nothing stopping the market from dropping another 10-20% before the real recovery can start.

Bad news is palpable. The Fed won’t stop until the economy gets cooler. Whether or not that entails a mild or serious recession, it means more challenging operating conditions for most companies and sectors.

It’s a negative. We’re seeing that play out right now in the way earnings growth has flattened out in the last few quarters.

And remember, this is the scenario where the Fed actually declares victory. Until the economy cools, interest rates will get higher. That doesn’t necessarily choke companies unless they rely on rolling over a lot of debt for survival . . . but it makes it harder for stocks to compete against bonds as investments.

Bonds were dead money when the coupon yields couldn’t even keep up with the Fed’s inflation target, much less the ambient rate at which purchasing power was evaporating day by day. Now, with long-term coupons edging above 4% in the post-2008 era, there’s finally a chance to earn significant income here . . . and that means stocks are no longer the only game in town.

Add it all up, I think we need to see bonds finally catch a bid before the weight on stocks lifts. And that means stocks need tangible good news before they can rise above that weight.

That isn’t happening this earnings season. It’s not an apocalyptic season, but the math just can’t support a huge lift.

As it is, the energy sector is carrying the entire market on its back. But while Exxon (XOM) and Chevron (CVX) are huge companies, the sector is just too small to do more than counteract weakness elsewhere.

Big Tech, on the other hand, might fumble the ball. In that scenario, a sideways market lurches to the downside and investors are staring at another season of disappointment.

And we’ll keep trading. Buy-and-hold investors will rise again . . . but not yet.