U.S. Market Poised For Volatility, Chinese Market On A Tear

Last week finished in the red after heightened geopolitical concerns and a couple of high profile earnings misses combined to trigger some selling.

While the bears are starting to circle the markets, these pullbacks seem to reflect bulls taking a breather and looking to buy at lower prices. This environment may lead to more weakness in stocks in the coming week, but a significant pullback appears unlikely.

Against that backdrop, any major action this week will be driven by earnings and a packed slate of economic reports.

The big reports likely to move the market include the second quarter GDP, expected to come in near a gain of 3 percent after a 2.9 percent decline in the first quarter. The granddaddy of them all – the jobs report--comes on Friday morning. Add in an FOMC meeting, monthly auto sales, and more housing numbers, and investors better be ready for a wild ride.

Related Link: Amazon Heavy On Markets And This ETF

SPDR S&P 500 ETF SPY

The index-tracking ETF is now 0.5 percent from an all-time closing high set July 24. More selling could occur this week, depending on what the bevy of reports to be released say. The support level to watch is $194.70, which is the 50-day moving average and would reflect a 2.2 percent pullback from an all-time high.

That level would be a small, healthy pullback and investors could consider it as a buying opportunity.

KraneShares CSI China Internet ETF KWEB

The Chinese stock market has been quietly breaking out the last few weeks.

Last Friday internet giant Baidu BIDU reported blockbuster earnings and rallied to a new all-time high. Baidu's success led to KWEB trading at a new four-month high. The stock is the number one holding in KWEB with an allocation of 11 percent.

Investors should start to watch the action not only in KWEB, but all China-related ETFs if the country continues to show solid economic number like the PMI that was released last week.