NEW YORK (TheStreet ) -- U.S. stock futures point to a lower open Tuesday, giving back some gains from yesterday's strong rally into the upper level of the current trading range. The market opened higher Monday amid relief that Hurricane Irene did not produce more catastrophic damage along the East Coast, and continued higher all day. Today, traders will be on the lookout for consumer confidence, as well as minutes from the latest FOMC meeting.
Yesterday's action represented a big short squeeze, but bulls couldn't keep the full court press on. Volume was very light yesterday, which is likely attributed to transportation issues in the Northeast following the hurricane. Still, expect volume to be light this week; market action may not have much bearing on the intermediate-term direction of the market.
Economists are expecting a sharp drop in consumer confidence, from 59.5 in July to 51.9, so that will be an interesting tidbit to keep an eye on this morning. Deteriorating economic data was one driver of the steep drop in equities we saw in early August. With no Fed programs supporting asset prices, and a stuttering recovery, the jury is out on whether the market's low for the year is in.
On a stock specific front,
continues to show relative strength following the resignation of CEO Steve Jobs. It appears that most investors have not been to troubled by the iconic leader's exit. Many had long-held fears over a 'Steve Jobs crash' on the day he quit or passed, but those fears never came to fruition. With that cloud of uncertainty now lifted, the stock is looking poised to make 52-week highs in the near future.
The banks will also continue to be key to the action. Last week, Warren Buffett's $5 billion investment in
Bank of America
resuscitated a lifeless sector. Confidence is a crucial ingredient for success in the banking industry, and Buffett's decisive hand provides that. In another move aimed at shoring up its capital base, Bank of America yesterday announced it would sell half its stake in China Construction Bank for about $3 billion. BAC gained more than 8% on the day following that news. Be careful trading banks -- major issues still exist and Bank of America's actions prove that the company harbors concerns about capitalization.
Overall, this is not a week to get aggressive as volume will continue to peter out as we approach Labor Day weekend. Traders may have unusual expectation for volatility this week given the type of August we have seen, but we should start to see some range constriction.
DISCLOSURE: Evan Lazarus has no positions
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.