Steady as she goes is good enough…for the moment. An old trader friend of mine said today was like drawing a pair of twos in a poker game…what do you do when you draw a pair of twos? You don't raise, you don't fold…you wait for another card.
The other card is economic data, particularly the Nonfarm Payroll report on Friday. ISM Services tomorrow is important because the service part of the economy is a little less sensitive to weather. A decent number, particularly the employment component, will be a big help for bulls.
We also get the ADP report tomorrow, which was not a very good predictor of the weak December jobs report.
With that said, all this discussion that the Federal Reserve may stop its taper program is way premature. They would have to be convinced that the U.S. economy is showing undeniable signs of a slowdown in the economy, and you don't get that from two data points.
A lot of people have come on our air saying that if we get another weak jobs report on Friday, on top of the weak December report, that would be sufficient for the Fed to consider stopping the taper program.
I don't buy that. I don't buy it because 1) there is a heavy weather overlay to the report, which clouds the results, and 2) even without weather, the Fed will need more evidence before they decide to halt or reverse the train. They stand to lose a lot of credibility by stopping the train, then realizing two months later that there was only a temporary blip in the data.
And remember, the next Fed meeting is not until March 19th. That means we will get another jobs report–for February–before they have to decide.
An improved February report, even if the January number is disappoint, would change the conversation.
Elsewhere: Pure nat-gas plays soar. With natural gas up over eight percent, passing $5, exploration and production stocks like Pioneer Natural Resources (PXD) are up three to four percent, but a subgroup of players that have heavier exposure to natural gas and very little exposure to oil are especially strong. Companies like Quicksilver Resources (KWK), Ultra Petroleum (UPL), Southwestern Energy (SWN) are up four to seven percent.
—By CNBC's Bob Pisani