Bear Teaser? Stock Market Week Ahead

What a crazy week we just had in the stock market. With Tuesday's higher close, and an almost certain Republican victory on hand that evening for the open Senate seat in Massachusetts by Scott Brown, the logical thinking would be that prices would keep going higher.

Even the pundits were screaming buys - Jim Cramer, Larry Kudlow and many others; although, it is not a stretch for them to be mad market bulls. The logic behind the thinking was that with his win, the health care bill would be dead and gridlock would be back in Congress.

Obviously, the market's reaction was quite the contrary. Prices slid the most in a very long time. It could be attributed to the new "Volcker Rule", the continued anti-bank populist rhetoric. It could be that stocks are not reflecting well to positive earnings. It may even be the possibility of tightening by China. Or, could it be the unraveling of the Euro, thanks to the uncertainty of Greece?

Whatever the cause, we as traders only care to see the what - what the market is telling us. Currently, it is telling us that we are at a cautionary point. Last week's sell-off was bearish, but in the context of the current run from last March, it may be just a necessary pull-back.

A lot of eyes will be on Apple's and Microsoft's earnings this week. For a complete list of earnings this week, click here. More importantly will be the much anticipated tablet/product launch from Apple on Wednesday.

Not expecting much from the FOMC vote on Wednesday, but the language will be one to watch.

Wednesday night, President Obama will give his State of the Union address to Congress and the public.

Finally, the biggest unknown, and potential market mover will the confirmation vote of Ben Bernanke, which is to come later in the week.

I would love to see this market go down a little tomorrow, possibly test the S&P 500 1085 level range, then bounce back up into resistance for possible short entries. I like the underbelly of the YTD range on the SPY, which is around the 113 level. But, with so many possible news making events scheduled for this week, I plan to be very nimble and tread lightly.