Our Newton models continue to show poor readings for equity indices. However, the bright spot for the last few trading weeks has been overseas markets relative to domestic. Fixed income is starting to grade out better as interest rates across the curve temper due to fears of a growth slowdown and a fall in inflation expectations.

Markets, for the better part of two weeks, have been in an extremely tight yet choppy range. Friday, investors cheered the job report pushing the index outside of the top end of the range. We now have some work to do in order to see if this is just another test to resistance, or something more. Investors will likely be glued in on 3,900 on the index level while that key level also happens to overlap with the 50-day moving average.

With the CPI report Thursday, expect elevated volatility as traders dissect the numbers. The end of the week will likely give us more certainty on whether this short-term move higher, which started Friday, is lasting or if it is yet another fake-out in this volatile trading market.

Beneath the surface, there isn't any trend as we are not seeing any strength out of any particular sector or theme. Although value has a slight edge over growth. Picking names with relative strength within sectors has remained the dominant and most effective strategy.