Ben Lichtenstein: Balance to the Bulls for Now, but Volatility Won't Be Gone for Long

Choice quotes from our Monday morning market outlook with Ben Lichtenstein, S&P futures pit squawker on the floor of the CME in Chicago and president of Tradersaudio.com: "We've been focusing on the dollar as it continues to hang out around this 81-even level, and looking for direction based on that." "We are seeing the fear slowly work its way out of the [EURUSD] trade." "Santelli put it the best I've heard it: It's not that we have anything really positive going on here. The economic indicators aren't screaming up. Data hasn't turned around: the housing market hasn't turned around, the job market hasn't necessarily turned around. It's just that the dollar is a bit better of an investment right now than the euro is." "I'd like to see dollar-strength, equity-strength. It's been a couple years since we've seen that, and I'm not sure we are going to see that right now. Possibly, we could see that scenario if we were to see some speculation that interest rates were going to rise and that that was actually going to be good for the stock market. Other than that, I think we are going to continue to see that inverse-type trade." "I think for the most part, sentiment is that we are stuck in this gray area right now. There isn't a lot of information one way or another, and it's still this waiting game that we are playing." "We are looking at that upper 1300 level. In terms of psychological numbers, we're talking 1250 and 1300. We are right in the middle of that right now, and I think that is going to set the tone or the stage for the initial move on the year. Right now, I think you have to give the benefit of the doubt to the bulls." "For the most part, there is very little certainty out there. There is an enormous amount of uncertainty. I think it's going to be similar to what we've seen. We will be waiting for news, and then that will sort of weigh on or fuel the market for a couple of weeks until we are looking for the next piece of news." "I think housing and employment are going to play. I think that could shift the focus to a more domestic focus if we start to see some of those numbers turn around. That would lose that whiplash effect or short-term reaction that is associated with some of that euro news if we were to get our domestic house in order." "We watched volatility taper off toward the end of last year, and so far, nothing really high energy in terms of the beginning of the year. Keep in mind that this upside activity tends to have less volatility associated with it than the downside activity." "I personally expect to see something very similar to last year [in terms of volatility]. I don't think the fundamentals have really changed."