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Will the Market Pass This Important Test?

February 10, 2012 10:25 AM EST
The U.S. stock market will experience a very important test Friday. Will it pass?

Everyone knows the market has rallied significantly so far this year, with the S&P 500 up over 6 percent since the start of the year. U.S. investors have been asking themselves if this rally is based on the situation in Europe improving or the realization the U.S. economy is improving. We've clearly witnessed both.

Stocks are down this morning on the back of the still-unclear situation in Greece, which can't get its own act together let alone get the rest of the Eurozone to agree. With the action, investors may be able to get some important insight into how the market is thinking.

If we rally into the close on our own it could suggest that the U.S. market has de-coupled from Europe, which would be huge. This would be confirmation that we are in a “buy the dip” market - ALL ABOARD

If we continue to trade off headlines in Europe it could indicate that we have a rough road ahead. After improving significantly, headlines from Europe will likely only get worse for the next little while. CAUTION FLAG

So there you have it - Are we a US-driven U.S. stock market? - or - a Eurozone-driven U.S. stock market? Today may give us an answer.


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