Worst Quarter in Five Years?

"We are beginning to see significant writeoffs, and there is always a tendency to throw in the kitchen sink when writeoffs become widespread within a sector," says McCain.

It should also come as no surprise that housing names are expected to hand in the worst of the earnings reports. Already, Lennar (LEN Quote) and KB Home (KBH Quote) have had ugly numbers.

As Mendelsohn points out, though, the market is prepared for the financials to report lower and for housing to be a disaster. Therefore, investors need to look elsewhere.

The decline in the dollar is especially critical for the industrial sector, including General Electric (GE Quote) and Honeywell (HON Quote). They are due to report on Oct. 12 and Oct. 19, respectively.

"Having a stable dollar is important. It's losing buying power everyday, which is not good for the American consumer," says Mendelsohn. "Businesses operating overseas are going to make American goods cheaper overseas."

As the consumer accounts for almost 70% of the U.S. economy, analysts say that spending needs to remain reasonably firm in order to top the Thomson Financial target.