RANGE OF THE MOMENT

The sell-off in the oil patch continues, and so does the constant barrage of new all-time highs hit by the Dow Industrials. While my gut tells me we are very near the bottom here in oil prices, you just don’t know how things are going to play out in volatile sectors like oil.

My gut also tells me that one way or the other, the general market is in for a change of direction, as well. For the past five weeks, the S&P 500 Index has been stuck in a trading range of about 2% in either direction. This is the longest the index has been in such a tight trading range since way back in 1993.

I think we are bound to get either a sizeable bounce in stocks, or more likely, a considerable pullback real soon in the major market averages. With earnings season kicking into high gear this week, corporate profits — and the guidance companies come out with for the next couple of quarters — could be the catalyst for a market change one way or the other.

We’ll be keeping a very close watch on all of the earnings announcements this week, as the near-term future of stocks could well depend on the latest news from corporate America’s balance sheets.