Traders watching these clues for a market breakout

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In the limbo ahead of the week's big events, traders will watch oil prices and S&P 500 price action Tuesday as signals on future gains.

"We've been caught in a sideways range and we're probably going to stay here until we get more clarity on the Fed," said John Caruso, senior market strategist at RJO Futures.

"I'll just be watching key resistance levels tomorrow," he said. He's watching to see if the S&P 500 can top 2,164 and then 2,174, before retesting its record close of around 2,190.

The area between 2,175 and 2,180 is a significant indicator on whether the S&P 500 can break higher, according to John Kosar, chief market strategist at Asbury Research. On the downside, he's watching 2,142 as support.

"Traders feel safe inside these parameters," he said. "Once you get outside the parameters, you're taking a directional bet for the very near term."

In that short-term outlook, oil prices will likely play a major role in driving stock market performance. U.S. stocks closed higher Monday as U.S. crude oil futures rose 3.09 percent to settle at $51.35 a barrel, the highest since July 2015. Intraday, WTI hit $51.60 a barrel, its highest since June 9, 2016.

The gains came after Russia said it was ready to join the Organization of the Petroleum Exporting Countries in limiting production.

"So far it's just words, and the same goes for OPEC," said Luana Siegfried, energy research associate at Raymond James. She said she wants to see actual figures on whether oil production comes down after such an agreement, but that she expects oil to reach $60 by the end of the year regardless.

Energy led S&P 500 sectors higher Monday, with the index closing 9.92 points higher at 2,163.66. The Nasdaq 100 closed at a record 4,893.77 as Apple shares jumped 1.7 percent. But the Nasdaq composite closed within half a percent of its all-time intraday high, while the S&P 500 was within 1.5 percent of its record.

"We have a market in search of a catalyst, and I don't know if the earnings season is going to bring that. … Perhaps there are some things clearly for equity prices to do better in the fourth quarter, but much will depend on the elections and Fed policy," said Mark Luschini, chief investment officer at Janney Montgomery Scott.

Analysts also attributed some of Monday's stock market gains to Hillary Clinton's improved lead over Donald Trump, after a rocky weekend for politics that wrapped up Sunday evening with the second presidential debate.

A leaked 2005 video of Trump's vulgar comments on women stirred controversy within the Republican party, while excerpts posted online by WikiLeaks indicated discrepancies between Clinton's public and private remarks on issues such as Wall Street and free trade.

Clinton doubled her lead over Trump in an NBC News/Wall Street Journal poll released Monday. Traders will be watching subsequent polls to see how well the momentum holds for Clinton, seen as maintaining the status quo and more favorable for markets.

"I honestly think the markets are starting to sniff out four years of Hillary," Caruso said. "I don't think Trump can recover from the past two weeks that he's had."

Ahead of Fed Chair Janet Yellen's speech scheduled for Friday, Chicago Fed President Charles Evans is scheduled to speak 10 p.m. ET, Monday on the economy and monetary policy.

Minneapolis Fed President Neel Kashkari is scheduled to livestream at 11 a.m. on Tuesday a question-and-answer session on ending too big to fail, the role of the Federal Reserve and other topics.

The only major economic news due Tuesday is the NFIB Index of Small Business Optimism for September, at 6 a.m. ET.

Meanwhile, earnings season unofficially kicks off Tuesday as aluminum producer Alcoa is set to report third-quarter results before the opening bell. The timing breaks a long tradition of posting results after the close, and marks the final earnings report before splitting into two publicly traded firms, Alcoa and Arconic.

Investors are watching to see whether earnings can return to growth this quarter or next. Third-quarter earnings per share are expected to decline 0.7 percent after falling 2.1 percent for the second quarter, according to Reuters. EPS growth is forecast to recover to a positive 8.4 percent for the fourth quarter.