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Market Preview: The Waiting Game

NEW YORK (TheStreet) -- The waiting game continues on Wall Street.

Tuesday was another ho-hum, low volume session as the major U.S. equity averages continue to digest the gains of the past two months and search for another positive catalyst to justify a move above the pre-financial crisis highs the S&P 500 briefly breached in intraday action a week ago.

Scott Wren, senior equity strategist at Wells Fargo, offered up this description of the current mood in the markets late Tuesday.

"As the summer comes to an end, many investors are wondering what the rest of the year will bring," he wrote. "Most are anxious and more than a bit nervous. Others have been lulled to sleep by low stock trading volumes and a lack of any meaningful market movement in recent weeks."

Wren cautioned investors against getting too complacent though, pointing to some major happenings on the near-term horizon, namely the European Central Bank's next monetary policy meeting on Sept. 6 and the August U.S. jobs reports set for release on Sept. 7, as bearing close attention, saying "these events have the potential to rile the U.S. stock market" if their outcomes fall short of investor hopes.

"The market is anticipating that the ECB will be in the market buying the sovereign debt of Spain and Italy in the near future," he said. "Investors are looking for further hints as to the timing and are hoping that something will be announced beyond just a cut in the overnight lending rate."

If that doesn't come to pass, look out. Of the jobs report, Wren said market expectations are low so a negative surprise, if it happens, shouldn't be all that big a deal this time around. Europe is simply a bigger concern right now.

Further out, Sept. 12 is the next key date, according to Wren. Not only will the Federal Reserve be starting its next policy meeting, but there are two events in Europe to watch closely: Germany's constitutional court is slated to rule on whether the country can participate in a permanent eurozone bailout fund and the Dutch are holding elections. Wren thinks the ECB could hold off announcing any sovereign debt purchase plans until the German court ruling is in, and notes the eurozone also needs the Netherlands to participate in its bailout plans.

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