Market Trend Points to Trading Range

Market Trend Points to Trading Range

Where are we now? Most likely trend remains a trading range.

For five weeks, the S&P 500 has been in a narrow trading range, from 1425 to 1465. (Read more: Futures Pro: S&P 1,500 Next Stop?)

More importantly, since the early June bottom, no pullback has been more than 4 percent.

Three events next week may move the markets:

1) more earnings

2) Europe

3) Fed meeting

In addition to the above influences, there are several moving parts that make calling the market in the next few months complicated:

1) the outcome of the election: the Street thinks a Romney win would be positive for stocks, a sweep of the Presidency, the House and the Senate by the Republicans would be VERY positive, and status quo would be a mild negative. (Read more: Your Money, Your Vote: CNBC Special Report)

2) the fiscal cliff: It has appeared on the radar of stock traders. If you think it's resolved in the next few months, can make an argument to buy.

3) economic data, which has shown some resilience, particularly for the consumer (housing, retail)

Earnings. Here's the trend:

a) Banks have been beating

b) Techs are reporting poor revenue growth on weak PC sales and business software. Longer term, there is a disruption going on in tech land. The WinTel model is dissolving.

Microsoft and Intel are an old story, but the slower business software story from MSFT is another headwind in addition to slower PC sales. Hewlett Packard and Dell aren't working. Photos are not being as printed as much, so anyone in the printer business is having a tough time.

Even digital brands are having a tougher time, with Google seeing disruption as it moves to mobile. (Read more: Google's Miss Is Even More Reason to Sell: Pro)

c) it's still early but Industrials and Materials are reporting weak revenues, with guidance cautious on weaker global demand

Right now, Q3 earnings are FLAT, with revenues expected up just 1.3 percent. Earnings for Q4 are expected to be up 9.8 percent, with revenues up 4.1 percent.

Bottom line: there is a lot of moving parts to the stock story.

—By CNBC's Bob Pisani

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