Maybe it's earnings season that will turn the tide for stocks.
Earnings are expected to show the worst decline since the financial crisis, yet analysts are holding out hope that the bar is low, earnings will beat and that will help pull the market out of its worst new year slump ever.
"What's going to have to happen is, you'll see earnings come in and you'll see the reality of how the corporate picture looks," said Brad McMillan, chief investment officer at Commonwealth Financial. "We got a lot of bad news priced into the market. I think some positive earnings surprises could help change the mood."
The major averages kicked off the year deep in the red and broke key psychological levels as concerns about global economic slowdown mounted. Corporate results, on lowered expectations, could shift investor focus back to signs of a more encouraging U.S. business environment.
"Next week earnings should be the dominant theme. What companies are saying in terms of their guidances, that should be something more than just sentiment pulling the market one way or another," said Quincy Krosby, market strategist at Prudential Financial.
The hope is a boost from outperformers could lift the overall index — at least in the short-term. FBN Securities analysis showed by just holding the S&P 500 between Alcoa and Home Depot earnings last year, investors would have returns of 10.8 percent.
At the very least, the overhang of economic slowdown makes it critical for investors to hold winners and avoid sharp losses from disappointing earnings reports.
"Our success in portfolio management is not just being in the right stocks," said Jack Caffrey, equity portfolio manager, JPMorgan Private Bank.
"You may think it's only a penny miss, but it's 'only a penny miss' on valuations that were not cheap," he said, noting higher volatility generally increases the downside pressure on stocks that miss expectations.
Read MoreRecession, bear market fears lead to market rout
The outlook for S&P 500 earnings is the bleakest in a while. The index is expected to post its first full-year decline in earnings per share since 2009, with a dip of 1 percent in 2015, according to S&P Capital IQ. The firm only expects three S&P 500 sectors to post positive earnings growth for the fourth quarter: telecommunications (18 percent), consumer discretionary (7.5 percent) and health care (5.6 percent).
Of the three, most analysts favor consumer discretionary and health care as beneficiaries of greater consumption power in the United States. Certain sub-sectors of the two have relatively low price-to-earnings ratios and are generally immune to the plunge in commodity prices and a slowdown in the Chinese economy.
"The industries are very specific again, areas people will continue to go to unless the economy takes a dramatic downward turn," said Robert Pavlik, chief market strategist and senior portfolio manager at Boston Private Wealth. He still favors recent outperformers such as Amazon, Home Depot and Starbucks.
But gains will likely be more muted than last year, which saw shares of Amazon more than double.
"If they post a beat, the reaction, unless it's a very big beat, is probably going to be muted, especially for the early-on earnings," Pavlik said. "As we get on, hopefully the concerns about China will begin to abate."
Wall Street has hammered losers in the last week and given winners little reward.
- Intel beat on both the top and bottom line, but shares plunged 9.1 percent Friday on news the data center revenue increased but was below expectations.
- JPMorgan Chase gained just 1.5 percent Thursday after reporting earnings that beat on both the top and bottom line.
- Alcoa fell 9 percent Tuesday after reporting earnings that beat but revenue that missed slightly.
A top performer in the S&P 500 last year, consumer discretionary is one of the greatest laggards in the index in the first two weeks of the year. That leads analysts to expect further opportunity for recovery in the sector in coming months.
Caffrey favors media stocks this year, which brings key spectator events such as the Summer Olympics and the U.S. presidential election.
"Election year does tend to result in a lot of advertising spending. … Traditional media still gathers large audiences, continuing to make them more attractive to ad spending," he said.
Read MoreDoes an Oscar matter in the age of digital media?
Health care will also largely depend on the political environment, many analysts say. Biotechnology stocks fell sharply amid fears of greater government regulation. Recent crackdown on drug price inflation also elevates concerns on pressure on pharmaceuticals overall.
But analysts still like select names in health care, especially since they are focused on the U.S. market and play off an aging population in need of more health care.
"Within biotech, rare disease companies are doing a good job of getting drugs approved on time," said Mike Bailey, director of research and chair at FBB Capital Partners.
He said FBB is looking at using the volatility in the market to add positions in names such as McKesson, whose P/E ratio is below those of its peers.
Technology is another sector analysts are selectively positive on.
Read MoreBharara calls on big tech to budge in terror fight
Apple continues to suffer from suppliers' announcements of reduced orders, indicating slowing demand for iPhones.
But the Edge is positive on Hewlett-Packard Enterprise, the spinoff unit of Hewlett-Packard headed by Meg Whitman that focuses on software and services. The earnings, which have no release date yet, will be the first time HPE reports as a separate company.
"We think with this breakup, especially with revenue stabilization, margin improvement, free cash flow growth, that's going to result in more opportunity for valuation expansion," said Jonathan Morgan, head of research at The Edge Consulting Group.