The comments below were provided by Kevin Lane of Fusion IQ.

This week's trading on the S&P 500 should tell us a lot about the stock market. The questions likely to be answered this week are the following: Is this just a pause that refreshes and prices then rise or are we entering a corrective phase in line with the typical seasonal summer weakness?

As seen from the chart below the market is equally confused, as the S&P 500 has been fairly directionless since early May, moving a few percentage points above and below the 920 level. To gain some direction (up or down) the Index needs to break either above 923 or below 875 (key intermediate term support).

Sentiment remains the market's friend as most sentiment measures suggest that investors have not endorsed the current rally.

S&P

S&P 500 - Daily