"There's too much uncertainty right now. The Morgan Stanley earnings didn't help, and ... Wells Fargo didn't help because all you're getting is confirmation that we just don't know," said Tim Smalls of Execution LLC. The market has been skittish about the Treasury's stress test of the 19 biggest institutions that took money under the government's Troubled Asset Relief Program.
Smalls said the S&P would have to break above 866 to move the market higher and below 828 to 835 to move it lower. "A lot of people call it a trading range. A lot of people call it mid range. I just call it no man's land," said Smalls. "You can't make a compelling case either way until you move beyond those levels. We need a directional move in order to get some confirmation. We just don't have that yet."
On Friday, details of what type of information the stress tests include will be released by Treasury and on May 4, the results for individual financial institutions will be released. The market has been rife with rumors of which banks will be reported to be the most troubled.
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Art Cashin, UBS director of floor operations, said the chatter Wednesday focused on how delicate the government has got to be in releasing information on the banks. He also said the market tilts to the negative side now that stocks failed to hold at a higher level in Wednesday's session. "They (the S&P) bumped into the same resistance. The resistance this morning was 860 to 865, and they stopped about five times in that area, so they just gave up. They can't push them through. The bears have a slight advantage. The bulls had the ball for a good part of the day. The bears have the slight initiative on the technical side," Cashin said.
Oppenheimer Asset Management's chief technician Carter Worth says he thinks the stock market's upward move is about to end.
"It's time to get off this ride. It's impressive. Six weeks straight up, and many stocks basically too far, too fast," Worth said on "Closing Bell."
"The thesis is that the proceeding weakness and six-week plunge of February/March, and now the mirror image recovery leaves the market sort of at a place where it should just stop, and go dead. So fair money, dead money."
He pointed to the performance of blue chips Wal-mart, Johnson and Johnson and Procter and Gamble, all trading lower for the whole day on Wednesday.
"It's sort of indiscriminate buying in what you would say are low quality type names, and bigger, thicker names are just not participating. For the week we're down on the S and P, and we're down on the Dow. We don't think there's forward progress from here. It's sideways or down," said Worth.
From 'Fast Money':
Yet, there are many traders not willing to give up on the S&P's 25 percent gain since early March, and there are those that say a pull back would be temporary, and an excuse for buyers to come in at lower levels.
Thursday Look Ahead
Weekly jobless claims are reported at 8:30 a.m., and existing home sales are reported at 10 a.m. The heads of credit card divisions at 14 major banks meet with President Obama and his economic team at the White House, as Washington threatens to crack down on high credit card rates and fees and other practices viewed as unfair to consumers.
On the earnings front, banks and financial firms are well represented. PNC, Credit Suisse, Fifth Third, and CIT Group report in the morning. American Express reports after the bell. (See more Thursday earnings below quote box.)