Chicago Purchasing Managers’ Index (PMI) & Pending Home Sales Reports TOMORROW

Stocks are chopping lower amid light trading and few catalysts to move things one way or the other. The S&P 500 is down 5.38 points to 2175 and 2 points from session lows.

Treasury bonds are flat after Consumer Confidence for August unexpectedly rose to 101.1 from 97.3 the month before. The yield on the benchmark ten-year ticked back to 1.58% after dipping to 1.57% overnight.

Crude oil gave up morning gains as well and is down 41 cents to $46.57. Gold dropped $5.5 to $1321.50.

On Wall Street, eight of ten S&P sectors are lower. Utilities (XLU) and Consumer Staples (XLP) suffered the biggest losses. Financials (XLF) and Basic Materials (XLB) are holding modest gains.

CBOE Volatility Index (VIX) is up .16 to 13.10 amid a second day of very light volumes in the options market. 10.6 million contracts traded Monday and the lightest volume in five months. 2.4 million calls and 2.4 million puts traded through the first two hours Tuesday. Projected volume is 11.3 million and 20% below normal.

Light volumes combined with a hefty dose economic data are likely to result in choppy trading heading into monthly jobs data Friday and the three-day Labor Day weekend.

The trend so far in August has been rangebound action and, as we can see from the chart below, the S&P 500 Trust (SPY) is basically flat since rallying on jobs data on August 5th. That report showed non-farm payrolls at 255,000 for July and 75,000 more than expected. SPDR 500 Trust rallied to $218.18 per share on the numbers on 8/5 and, by way of comparison, opened today’s trading session at $218.26 per share.

See Tradespoon’s Stock Forecast on SPDR 500 ETF Trust (SPY)

See Tradespoon’s Stock Forecast on SPDR 500 ETF Trust (SPY)

Economists expect Friday’s report to show the economy adding 175,000 jobs in August and the rate of unemployed remaining unchanged at 4.9%. Like the report in early August, the numbers could serve as the next major catalyst for the S&P 500 in the near-term.

Until then, a few other reports might potentially stir stocks and bonds before the three-day weekend. ADP offers a first peek at the August jobs situation with a private sector report tomorrow morning. Chicago PMI and Pending Home Sales will also set the tone for trading Wednesday morning.

The first day of September brings Jobless Claims, Construction Spending and ISM. The auto-makers release their monthly sales numbers Thursday as well. Then, in addition to the jobs report, Trade Balance and Factory Orders will also be released Friday morning, before trading slows again into the three-day weekend.

On the technical front, the key levels on the S&P 500 Index are resistance at 2180, 2190, and 2194. Support likely at 2175, 2160, and 2147.