The S&P levels to watch amid a huge week for the market

Pick your potential stock market mover this week. The Trump-Kim summit could forge diplomatic ties between the U.S. and North Korea, meetings from the Fed and ECB will dictate changes in global monetary policy, and a decision on the Time Warner-AT&T deal sets precedent for any future M&A activity in media.

There are a few key levels to watch on the S&P 500 in such a market-moving week, says Craig Johnson, chief market technician at Piper Jaffray.

"This is a market that we may grind higher in here but it's going to be a lot more difficult. There's going to be a lot more back and forth to continue to make this forward progress," Johnson told CNBC's "Trading Nation" on Friday.

After breaking through resistance at 2,740, Johnson is now watching for whether the S&P 500 retests its previous highs of 2,780 to 2,800 seen in February and March.

The benchmark index retook and built upon a level above 2,740 in early June, returning to highs not seen since mid-March. That one-time level of resistance should now act as support, says Johnson. He sees additional support close to its 50-day moving average at 2,700.

The S&P 500 should reach 2,850 by year's end, according to Johnson. Such a level represents 2.4 percent upside from its current position and a 6.6 percent advance for the year.

"I think that there are some headwinds emerging," added Johnson. "The dollar strength we've seen lately and also the Treasury yields having started to trend higher, too. [They] will be something we're going to have to look at more carefully as we move into the second half. But, for now, more consolidation, more chop."

Larry McDonald, editor of the Bear Traps Report, says the fallout from the Fed's plans to reduce its balance sheet could induce a more dovish lean this week.

"It's a $1.5 trillion of balance sheet reduction over the next two years and at the end of the day we also have tax cuts as well as trillion-dollar deficits from Washington, so that's a lot of dollars being sucked out of the global economy and it's caused some carnage in emerging markets," McDonald told Friday's "Trading Nation." "I think there's some pressure on the Fed to come up with a dovish statement."

Possible signs of a gentler Fed, which announces its decision on interest rates on Wednesday, should give rise to a bounce in emerging markets and commodities such as gold and silver, says McDonald.

The S&P 500, the EEM iShares emerging markets ETF and gold prices were close to flat on Monday. Silver was up more than 1 percent.


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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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