Market Insider

Traders watch data, earnings ahead of long weekend

Triple witching expiration, General Electric's earnings and industrial production could all help shape Friday trading.

Industrial production is at 9:15 a.m., after housing starts are reported at 8:30 a.m. ET. Consumer sentiment is released at 9:55 a.m.

GE earnings are expected before the bell, and the company's commentary will be watched for what it says about the global economy and its own outlook. The parade of financial earnings continues with reports from Morgan Stanley, BNY Mellon, M&T Bank and SunTrust. Schlumberger also reports.

Traders on the floor of the New York Stock Exchange
Richard Drew | AP

Stocks mostly slumped Thursday, after Wednesday's recovery rally, and traders were watching for possible volatility Friday related to the triple expiration of futures and options. The Dow slid 64 points to 16,417, and the was off 2 at 1,845, but the Nasdaq was up 3 at 4,218.

The 10-year note drifted slightly lower, to 2.84 percent.

Julian Emanuel, U.S. equities and derivatives strategist at UBS, said the expiration Friday may be a nonevent.

"From my perspective, look at the way the market traded the last week," he said. "You're going into a three-day weekend, and I just don't see a ton of fireworks tomorrow."

(Read more: Art Cashin: You needto 'stay alert' tomorrow)

Emanuel said the volatile back-and-forth trading in stocks could continue next week, and he said investor confusion is apparent in the latest sentiment survey from the American Association of Individual Investors.

The survey showed an 8.5 percent jump in neutral sentiment, to 39.5 percent—a 12-year high. It is the first time since Nov. 21 that neutral sentiment is higher than bullish sentiment, and it is well above the historical average of 30.5 percent.

Bullish sentiment fell 4.6 percent to 39 percent; bearish sentiment fell 3.5 percentage points to 21.5 percent.

(Read more: Bond shorts at more than five-year high)

Paul Hickey, co-founder of Bespoke, points out that bullish sentiment is just above the average of 38.7 percent it has been at since the bull market began. It had been running very high—55.1 percent at the end of last year—a contrarian indicator.

"I think you do have confusion on the part of investors," he said. "They don't know what to do."

Hickey also pointed out that investors were not consistently bullish in 2013—a year in which stocks went straight up—with sentiment consistently above 50.

"Overall on the market ... people still have the feeling it could be quick to end, so there's certainly hesitancy on the part of investors," he said.

—By CNBC's Patti Domm. Follow here on Twitter @pattidomm.