Stocks Still in Bounce Mode: Morning Call

NEW YORK (TheStreet ) -- Markets are still in bounce/relief mode as the move off the lower-end of the trading range continues.

Most stocks pulled off the highs in the last hour of trading yesterday, but are opening up somewhat close to yesterday's highs. The next few days can be very choppy as we still have important headlines to deal with. At this point, it feels like this is a good spot to lose money as some traders will be leaving for the Jewish Holidays, and volume will most likely be light.

The S&P 500 is up 8-12 handles with resistance at yesterday's high of 1195. The next level will be the 50-day moving average: the market failed at the 1207 area. The major technical zone to watch will be 1220-1230 -- the upper end of the range we've been navigating since early August.

Support in the S&P 500 lies at 1162-1165 and then 1135. At this stage most stocks seem to have run the course for their easy technical bounces, and now it's a matter of whether than can sustain any momentum. We have yet to see tradable momentum, and things can turn on a dime. Keep things light at these levels given everything going on this week.

If you're looking to get short, don't fight this move. Instead look for a more calculated short entry. It can be frustrating to see these low-volume, dead air type bounces, but it is the reality of this market right now. That is why you don't short after a big flush, because it doesn't take much buying to trigger a squeeze. You could be right, but it might not happen when you want it to.

The main trading catalysts/notable events for the market right now are:

Europe

• Several EFSF votes (Slovenia-Tuesday, Finland-Wednesday and Germany-Thursday)
• Oct. 1 meeting between Angela Merkel and Nicolas Sarkozy
• Oct. 3-4 Eurozone financial ministers meeting
• Oct. 6 ECB meeting (25-50bp rate cut, 6/12m tenders and covered bond buybacks expected)
• Oct. 6 BOE meeting (market increasingly anticipates more QE)
• Oct. 13 meeting to agree on release of Greek tranche
• Oct. 14-15 G20 financial ministers meeting
• Oct. 17-18 EU heads of state summit
• November 3-4 G20 heads of state summit

China

The country's National Day holidays start on Saturday, Oct. 1. Chinese PMIs for September are to be released on Sept. 30.

U.S. Bernanke speaks Oct. 4 (his first address since unveiling "Twist"). November 23 is the deadline for the congressional "super committee" to concoct a long-term deficit plan.

Holidays

Rosh Hashanah starts Wednesday night (and runs through Sept. 30).

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.