Market's seasonal cheer on hold until oil finds footing

What's typically a jolly time for the U.S. stock market has been anything but this December, with equities unlikely to find their footing until the price of oil stabilizes.

"Seasonally it's extremely disappointing, as this is about the time you'd expect an upward bias to the markets," Jim Russell, portfolio manager, Bahl & Gaynor, said of the market's recent pullback, which has had the S&P 500 down for five out of the last six sessions, and tacking on another 0.6 percent decline on Monday to last week's 3.5 percent drop.

On Monday, crude futures for January delivery declined $1.90, or 3.3 percent, to close at $55.91, the lowest finish since May 2009.

"It's anybody's guess when oil prices stop declining. There is sufficient momentum to the downside that it probably overshoots beyond fundamentals," Russell said.

The drop in the price of crude came amid signals of weakening demand, with the Organization of the Petroleum Exporting Countries reducing its outlook for how much oil it would need to produce in 2015 and the International Energy Agency projecting softer consumption and more supply from countries outside OPEC.

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Beyond tracking crude's moves, investors should have an eye on the Federal Reserve, as Tuesday brings the start of a two-day Federal Open Market Committee meeting, with many expecting the central bank to drop its pledge to hold interest rates low for a considerable period.

"Investors seem to be of the mind to fade the rally and wait for more clarity around the Fed's announcement on Wednesday, and second to find a bottom to oil," said Russell.

"Will the Fed focus more on the labor-market data or on the drop in oil and what that means for inflation. That will set the tone for the last couple of weeks of the year," said Peter Boockvar, chief market strategist at The Lindsey Group.

On Monday, U.S. stocks finished lower, topping off a wild ride that had the Dow Jones industrial average trading in a more than 300-point range on either side of neutral as investors monitored the price of oil.

Read MoreWild session ends with extension of last week's rout