Equities saw a little light yesterday as all the major indices rallied throughout the day. Corporate results and a better than expected Weekly Jobless Claims number helped stocks end their losing streak.

But Reality is the TRIN indicator showed oversold imbalance Wednesday. The Central Bank of Russia cut its interest rate to 15% after just one month prior it had raised rates to 17%. The EU extended sanctions against Russia and the turmoil may be turning into an Economic War as lagging Oil prices are also crippling the country.

Since first breaking above 2000 in November the stock market has re-tested this level four subsequent times. Thursday provided yet another bounce back above this key level…

But will it last???

The answer lies in the economic news on the way over the next week starting with Q1 GDP today. The consensus stands at +3.2%, yet there is good reason to believe it could be much higher.

Next week, you get the big four reports: ISM Manufacturing, ISM Services, ADP Employment, and Government Employment Situation. The first and last of these will hold the most sway with investors.

Focusing on employment it should be noted that Jobless Claims Thursday came in at a 15 year low of 265K. That is a pretty big deal since the correlation between this report and monthly job gains is very strong. So that tips the scales towards the employment reports being positive.

Add it all up and it says the ISM Manufacturing is the wild card. And if it’s weak, then yes, investors should get more defensive for a while. If it’s strong, then the stock market should start moving back towards 2100. So let’s keep a close eye on that report Monday.  Then Friday (and the first Friday of every month) is the NFP Non-Farm Payrolls and Unemployment rate.

Busy week ahead:

Feb 02 08:30 Personal Income
Feb 02 08:30 Personal Spending
Feb 02 08:30 PCE Prices – Core
Feb 02 10:00 ISM Index
Feb 02 10:00 Construction Spending
Feb 03 10:00 Factory Orders
Feb 03 14:00 Auto Sales
Feb 03 14:00 Truck Sales
Feb 04 07:00 MBA Mortgage Index
Feb 04 08:15 ADP Employment Change
Feb 04 10:00 ISM Services
Feb 04 10:30 Crude Inventories
Feb 05 07:30 Challenger Job Cuts
Feb 05 08:30 Initial Claims
Feb 05 08:30 Continuing Claims
Feb 05 08:30 Trade Balance
Feb 05 08:30 Productivity-Prel
Feb 05 08:30 Unit Labor Costs
Feb 05 10:30 Natural Gas Inventories
Feb 06 08:30 Nonfarm Payrolls
Feb 06 08:30 Nonfarm Private Payrolls
Feb 06 08:30 Unemployment Rate
Feb 06 08:30 Hourly Earnings
Feb 06 08:30 Average Workweek
Feb 06 15:00 Consumer Credit

Read more: http://briefing.com/investor/calendars/economic/2015/02/02-06#ixzz3QKQaA5ae

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