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Without any more help from the U.S. Federal Reserve, U.S. stocks are on their own - and they're in for a rocky ride.

Markets have slumped as the Fed has not indicated it will initiate another round of quantitative easing, and last week was a sign that there's more volatility ahead.

Stocks were as jittery as June bugs, jumping higher in the first couple of days and the last couple of days on signs of improvement in the economy, but sinking hard in the middle on renewed fears about European debt woes.

In the end the major U.S. indexes were up by a whisker for the week. The Dow Jones Industrial Average (NYSEARCA:DIA) rose 0.4%, the Standard & Poor's 500 Index (NYSEARCA:SPY) rose 0.01%, the Nasdaq (NASDAQ:QQQ) fell 1% and the Russell 2000 small caps (NYSEARCA:IWM) rose 0.3%. On Friday, 67 stocks on the three U.S. exchanges hit new highs, while 170 hit new lows.

Contributing to the jumpiness was a key data point released on Friday: the University of Michigan survey on U.S. consumer sentiment. The index took a larger-than-expected face-plant in June, sinking to the lowest level of the past few months and logging the first decline since February. Consumers are definitely becoming more pessimistic, or at least less optimistic, than they had been earlier in the year.

The numbers show that confidence has not run off the road, but preliminary data shows that the first half of this month has been scary for people -- and scared people don't go out and buy cars, make lavish vacation plans or buy big pieces of jewelry as birthday gifts. They pull in their buying appetites a bit, and that can impact retailers' and manufacturers' earnings.

Who can blame consumers, though, right? There are threats of downgrades to the U.S. debt rating, the Fed chairman in a speech called the recovery -- which he helped engineer --"frustratingly slow," and there has been an endless string of natural disasters.

On the positive side of the ledger, gasoline prices have fallen hard, which takes away the evil "pump tax" that cuts into households' budgets.

Now looking a little more broadly, one more report came across the wire late last week that you need to know about.

The U.S. leading index of economic indicators rose 0.8% in May, which was above expectations and the largest advance since February. The main reason was an increase in building permits, capital goods orders and a slight decline in jobless claims.

Now when you put these data points into a cocktail shaker and pour it out, it seems that the overriding sentiment is worry. That's probably why the number of Google (NASDAQ:GOOG) searches for "double dip recession" has surged and the old "Misery Index" -- inflation plus the unemployment rate -- has hit a 28-year high.

My sense in talking with customers, friends, cab drivers, grocery store clerks, random parents at my son's high school graduation and watching trending Twitter topics is that people are not as gloomy as all these indicators seem to suggest. It really takes a lot to knock down the spirit of Americans in the summer, when school is out and the sky is blue, MLB pennant races are heating up, and thoughts turn to Fourth of July barbecues and vacations.

Yet we need to respect the fact that due to the thinning number of jobs, the lack of wage increases, the squabbling in Congress, the mess in Europe and paralysis at big companies ranging from Research in Motion Ltd. (RIMM) to Bank of America Corp. (NYSE:BAC), no matter how good people feel at their core they may simply be unwilling or unable to spend as much as they have in years past. And there is no getting around the fact that this is going to condemn the United States to a couple of years of sub-par gross domestic product (GDP) growth.

From a stock market perspective, investors have felt as if they had one ace in the hole at times like this. They have always figured that if things get really bad the U.S. Federal Reserve Bank will play its quantitative easing card again, print more money and all will be well in the realm of finance.

But Fed Chairman Ben Bernanke has spent the past few weeks trying to dampen that expectation, and my guess is that signs of a renewed economic slowdown will not prompt a knee-jerk reaction from the central bank when its two-day policy meeting finishes up on Wednesday.

Moreover, the statement issued by the Fed's rate-setting committee is likely to acknowledge a deceleration in momentum, and the chairman will restate the same in his news conference. Yet because the Fed thinks that the slowdown is due to temporary factors like the bad weather and the supply disruption stemming from the Japanese earthquake, it is not going to offer any hint of a new round of quantitative easing -- especially since there is growing evidence that the last round did not help much.

Traders love this market volatility, while investors should be looking actively for bargains. Wall Street is a zero-sum game; for one party to win, another must lose. The markets may be in a bit of a no-man's land at the moment, but this sort of jumpiness creates the sort of fog that experienced investors leverage to their advantage. People with conviction about value and opportunity make their greatest strides at times like this when the herd lacks direction.

While bargain hunting, the one thing investors should watch with an eagle eye is the 1,250 area of the S&P 500. That is the line in the sand for the intermediate-term trend. If bulls do not buy the market by the 1,247 level -- a couple of points below the 1,250 level -- then they will be making a clear statement that the entire QE2 rally in U.S. stocks from September of last year may need to come undone.

Bottom Line:U.S. stocks are going to be on their own during the next few weeks, with no pats on the head or backstopping by the Fed. That should provide more volatility than ever, and thus opportunities for traders and long-term investors. Look for utilities, consumer staples and healthcare to outperform, and tech to suffer.

The Week Ahead

June 20: No economic releases scheduled.

June 21: Existing home sales for May.

June 22: Federal Reserve's Open Market Committee will announce its short-term target for interest rates and issue a statement on the health of the economy. Fed Chairman Ben Bernanke will speak at a press conference afterwards at 2:15 pm ET.

June 23: Initial unemployment claims for the past week; New home sales for May

June 24: Durable goods orders for May; GDP estimate for the first quarter.

Disclosure: None

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Source: Watch the 1,250 Area of S&P 500 as the Fed Abandons U.S. Stocks