Yesterday, the S&P 500 traded in a two point range most of the day. It is up one point in early trading and it looks like another quiet day.
China’s market is closed this week in celebration of the New Year. The economic calendar is light and earnings season is winding down. The biggest event of the week is the State of the Union address tonight.
President Obama’s speech has been widely publicized and there will be many surprises. It will focus on job growth. We can expect plenty of banter between both parties. The market doesn’t have much to trade off of and I believe the price action could be a little soft tomorrow.
Asset Managers have been waiting for a pullback and I don’t believe they will get one. The market tested the downside last week and it rebounded immediately.
Initial jobless claims will be released Thursday. Friday we will get Empire Manufacturing and Industrial Production. These numbers won’t move the needle.
Monday is a national holiday and that will also reduce trading volumes heading into the weekend. Flash PMI’s will be released next week and that is the next meaningful economic data point.
Look for very quiet trading. Momentum should push the market higher after a small pullback tomorrow.
Option traders should keep positions small. Time decay will be an issue.
I am day trading and I am keeping my size small. Stocks are in a tight range as well and it is tough to scalp a profit in this environment.
Look for conditions to improve next week.