‘This’ Catalyst Above All Others Will Drive Market: Pros

On Wednesday investors were struggling to figure out if the stock market was about to begin the next leg higher or if it had topped out.

People want to know, "What's happening in the market. What's next?"' said John De Clue, global investment strategist at U.S. Bank. "There's a classic tug of war going on, between those indicators that show things are improving and those indicators that show things are a little more troubling."

On the bullish side of the argument, UBS raised its target level for the S&P 500 by the end of 2012 to 1,525 from 1,375 saying equity markets will climb after aggressive monetary easing by central banks.

Also, Boston Fed President Eric Rosengren said the Fed's actions last week "should result in stronger economic growth, and return the US to full employment more quickly."

Last week, the Federal Reserve announced a third round of stimulus or quantitative easing, with the program continuing indefinitely, until the Fed feels employment has improved.

But on the bearish side of the argument, several economic indicators painted a sobering picture of the global economy.

For example, U.S. manufacturing closed out its weakest quarter in three years this month, and the number of Americans filing new claims for jobless benefits held near two-month highs last week. The U.S. data followed disappointing manufacturing reports from Europe and China.

Considering some economic indicators suggest that things are improving yet others appear to be a little more troubling. What should you be watching?

Fast trader Keith McCullough, CEO of Hedgeye Risk Management, says it all comes down to earnings. “FedEx , Staples and now Norfolk Southern have all given us cause for concern,” he says.

Trader Josh Brown, author of The Reformed Broker blog, agrees. You've got to watch earnings. “We’re seeing heavily cyclical companies saying they are not confident in the future.”

McCullough, Brown and the other Fast Money traders all feel the weakness will either be confirmed or denied by earnings.

They add that you may hear a lot of headlines and hype as the election approaches, but they say don't let it distract you from what really matters -- corporate results.

It’s a lesson as old as Wall Street itself, but the pros seem to think it bears repeating. As earnings go, so goes the market.

Posted by CNBC's Lee Brodie

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Trader disclosure: On Sept. 20, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Dennis Gartman is long AUD; Dennis Gartman is long CAD; Dennis Gartman is long GOLD; Dennis Gartman is short Euro; Dennis Gartman is short Yen; Dennis Gartman is short Crude Oil; Dennis Gartman is short SOY; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Steve Weiss is long T; Steve Weiss is long VZ; Steve Weiss is long VOD; Steve Weiss is long AAPL; Steve Weiss is long TOT; Steve Weiss is long HK; Steve Weiss is long AIG; Steve Weiss is long BAC; Steve Weiss is long BBT; Steve Weiss is long QCOM; Steve Weiss is long MTGE; Steve Weiss is long CINY; Steve Weiss is long AMTG; Steve Weiss is long M; Steve Weiss is long EUO; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long DD; Stephanie Link is long NKE.

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