Here's what may get stocks moving again

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We have been stuck in the 1,680-1,700 range on the S&P 500 (with the exception of a few days) for almost a month now and, inevitably, everyone is wondering: what will move the markets forward again?

My thoughts:

First, simple underperformance may be enough. Another three weeks of modest declines...say, one percent a week...may be all that is necessary. Most frustrated analysts are not looking to sell and flee the market; they are looking to buy lower. The biggest decline we saw this year...from May to June...was a decline of seven percent.

Absent that, we need to resolve two other issues in the next month:

  1. Is a September tapering priced in? My own guess is that, assuming the tapering occurs as expected (bond purchases go from $85 billion to $65 billion a month), the S&P 500 drops, say, three percent over the course of a couple days, then rallies.
  2. What happens to European stocks after the German elections? The elections are September 22nd, and there seems to be an All Quiet on the Western Front mentality right now.

Remember, recently money has been rotating from the U.S. and Japan into Europe and, to a lesser extent, select emerging market countries.

Problem is, this rotation is based on a calm that may, or may not, be real. Europe is vulnerable for several reasons.

From what I can see, it looks like Greece and Portugal will need new bailouts, and the stability of the governments of Spain, Portugal, Italy, Holland, and Greece are questionable.

There has also been very little progress on the Banking Union that was a centerpiece of reformists this year.

Another problem for Europe: it ain't cheap. The Vanguard FTSE Europe (VGK), one of the largest European ETFs, hit a two-year high on Friday.

By CNBC's Bob Pisani

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.