Traders work on the floor of the New York Stock Exchange.
Earnings news from Amazon and Alphabet, the important January jobs report and Washington’s discussion of stimulus could all be important to markets in the week ahead, but none of it is likely to get more attention than the short squeezes driven by retail investors.
Stocks had a rocky week, with the S&P 500 down 3.3% to 3,714. The S&P was down 1.1% for January, its first negative month since October and a warning for the year, according to the old Wall Street adage.
“We were due for some type of decline. We’ve been straight up since October. It’s not unusual that we’re backing off a bit,” said Steve Massocca, managing director at Wedbush Securities.
Trading could remain bumpy in the coming week, as the S&P 500 struggles to hold above 3,716 its 50-day moving average and a key technical level.
“This is the first time we’re at the 50-day moving average since early November,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “It’s just a level we haven’t seen in a while and it’s an important first line in the sand of whether the market uses this as a pivot spot to bounce again.”
“The buy the dip mentality doesn’t die easy, but if you break that [50-day], that portends something else,” he said.
Massocca and others see little impact on the broader market from the phenomena