Defining Day

I believe that tomorrow (Sept. 23rd) will define the direction of momentum for the markets in the next short term stretch. The key to the sideways market has been timing the momentum switches as its traded sideways and relatively flats for the past 6 months at least.

Well, the market has certain ridden a recent bullish tide from 1050 all the way to 1140, albeit on light volume. The past two days have seen financials and tech slip some on the S&P (leaders often times), and tomorrow the markets face a day of data ... jobless claims at 8:30am, existing home sales at 10am, and leading economic index data at 10am.

Honestly, these reports shouldn't reflect alot of truth or new evidence. Jobless claims may continue to hover around -450,000 but even if they modestly improve, the jobs picture won't be changed tomorrow from yesterday. Existing home sales are expected to "rebound" albeit this is mainly because of nearly 30% plunge from prior data in recent months. Again, housing is where it is and a "rebound" doesn't really change the over 12 months supply of inventory with more bank foreclosures on the way. Finally, leading economic data is expected to show a 0.1 increase. Such minimal readings are like GDP...you could have 0.1% growth or 0.1% decline. Either way it would feel like a recession to the average Joe.

So while the reports won't be that telling -- seeing how the market chooses to highlight and "spin" each report to either the upside or downside should give a huge sign as to whether the momentum will remain bullish or whether its the bears turn in this endless tango.