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Thanks to Friday's gains, the market managed to end the week in the black…though just barely. The advance unwound the prior week's small loss and threat of a bigger pullback. Yet, there's still something uncertain about the effort to renew the uptrend. Is it really prudent to be bullish here? The answer varies depending on which index you're talking about.

But, first things first. Let's poke and prod last week's economic numbers so we can get a feel the market's undertow.

Economic Calendar

Last week was chock-full of economic data last week, but housing and construction dominated the landscape. And the news continued to show strength.

New homes sales for January rolled in at a pace of 437,000 units per year - the best pace in more than four years. Pending home sales jumped 4.5% as well, and home prices advanced respectably in December no matter which measure you look at. The Case-Shiller 20-City index said home values were up 6.8% in December, and the FHFA Housing Price Index was up 0.6% for the same month.

And, broadly speaking, consumers (shoppers/buyers) say they're feeling better about things… a shift in opinion that jives with real strength from the housing sector. The Conference Board's consumer confidence number grew from 58.4 to 69.0 for February. The Michigan Sentiment Index has also been trending higher, and followed the consumer confidence figure's lead for last month.

Consumer Confidence
(click to enlarge)

What's amazing is that confidence improved despite some alarming problems on other economic fronts. One of those other fronts was durable orders. Total durable orders (which includes transportation) slumped 5.2% in January. Taking planes, trains, and automobiles out of the picture, the durable orders figure improves to a positive 1.9% for January. Problem is, transportation is such a huge part of the economy.

Another economic tripwire is January's 3.6% decline in income. Much of that dip may have stemmed from the fact that a payroll tax break worth about 2% of every American's paycheck expired at the end of last year, meaning all those workers are taking home 2.0% less now. It doesn't explain the remaining 1.6% of the dip though.

Everything else is on the grid.

Economic Calendar

The coming week won't be quite as busy, but more than that, this week will be nearly-singular in focus - all eyes will be on the latest batch of employment data.

The ADP Employment Change figure will drop the first hint on Wednesday; economists expect the payroll company to sat 150,000 new jobs were created in February, down from 192,000 new payrolls in January. It's progress, but not actually enough new jobs to keep up with population growth and newcomers to the workforce.

Aside from Thursday's new and ongoing unemployment numbers, we won't hear anything more about the current employment picture until Friday, though Friday's data will more than make up for lost time.

The biggie is the unemployment rate for February. The pros say it's not going to budge from January's 7.9%. Those same pros also say the government will count 178,000 new private-employer jobs for February (165,000 new payrolls when factoring in the loss of government jobs).

Stock Market

As was the case a week ago, we really need to dissect all three major indices to fully understand everything in play right now for the overall market. We'll start with the S&P 500 (SPX) (SPY), however.

Above all else, the S&P 500 ended the week on a bullish note, and with some bigger bullish momentum. The most impressive part about last week's 2.6 point (+0.17%) advance was that it overcame Monday's 27.75 point (-1.8%) plunge. That was the perfect time and reason for the bears to finally tip the market over and spur an overdue wave of profit-taking. But, they didn't do it. They left the window open for the bulls to take control again, and the bulls did just that.

In retrospect we can see why - there's a huge confluence of support all around the 1495 area now. That's where the SPX bottomed in early February, where the lower 20-day Bollinger band is now, and where the 50-day moving average line (purple) will be pretty soon. Also see the CBOE Volatility Index (VIX) (VXX) below.

S&P 500 & VIX - Daily

The problem for the S&P 500′s bulls is that the upper 20-day Bollinger band still lingers above, at 1532. It's been a problem of late, and we suspect it will be a problem area again. Until the index can actually move above that mark and/or force that upper 20-day Bollinger band to slope upward again, any bullishness is suspect.

Dow Jones Industrial Average

While the S&P 500 may still need to contend with its upper Bollinger band, the Dow Jones Industrial Average (INDU) (DIA) is already positioned to blast past its upper 20-day band line at 14,115. And, the Dow has made it past the key psychological resistance line at 14,000. Though the swath of technical support for the Dow isn't as well-defined as the S&P 500′s, it's somewhere around 13,860, though it may be irrelevant at this point. If the Dow can set up a base here and/or push up and beyond that upper band line, there will be no way of denying the market's bullish.

DJIA - Daily

NASDAQ Composite

The NASDAQ (COMP) (QQQ) has some qualities of the both the S&P 500 as well as the Dow Jones Industrial Average right now. One of those qualities is crystal clear support at the converged 50-day moving average line and the lower 20-day Bollinger band. As long as that floor around 3120 holds up, the bulls remain in the game. At the same time, the NASDAQ's upper Bollinger band at 3220 is also going to be a ceiling again, as it was in late January and early February.

NASDAQ Composite - Daily

The only thing philosophically wrong with the fact that the NASDAQ is furthest away from a breakout while the Dow is on the verge of one is the fact that the NASDAQ should be leading, whether that's a bullish or bearish trend. To see it lagging now really undermines the likelihood that we're on the cusp of another bullish leg - also watch the small-cap Russell 2000 (RUT) (IWM).

Bottom Line

It's certainly not very sexy to suggest there's nothing trade-worthy going on right now, but if that's the way it is, then that's the way it is. Trying to make something out of nothing can be dangerous, so the smart move right now is simply to wait and let the chips fall where they may. In other words, we need to let either the floors or the ceilings break before making a call.

Source: Market Outlook - On A Tightrope

Additional disclosure: BigTrends.com Rapid Options Income subscribers have an open SPY options position.