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It's a typical mid-month light economic calendar, made lighter by widespread August vacationing that encourages quiet low volume trading barring any nasty big surprises.

Here's what to monitor.

1-3. FUNDAMENTALS

1. Surprise EU Related Events

EU crisis related surprises always have the potential to dominate markets. There's been no progress towards a genuine solution (see here for how to distinguish real EU solutions from the usual fakes that just buy a little time). Next week is supposed to be quiet regarding GIIPS bond auctions or EU meetings, so barring any EU surprises, the focus may well continue to be on….

2. News Raising or Lowering Hopes For New Central Bank Monetary Easing

As we discuss here, were skeptical about not only the value of this approach but also whether it will even be implemented any time soon.

3. Scheduled Economic Calendar Events: A light calendar

Tuesday

EU: Batch of GDP, jobs, and inflation data from France, Germany, and the UK. Each is second tier, but if together they paint the same picture they could be significant for moving sentiment on the EU.

US: retail and PPI data

Thursday

UK retail sales

US building permits, weekly jobless claims, Philly Fed Mfg index

Friday

German PPI

Canada CPI

US Preliminary UoM consumer confidence

In sum, if there are no big surprises, it's likely to be a quiet week of range bound trading best used for taking a break and watching.

4. TECHNICAL RESISTANCE LEVELS: BEWARE

The big caveat here, however, is that the rally since May has brought most risk assets back near multi-year highs. With little in the way of really positive news due in the coming week, that creates an excellent chance for some kind of pullback.

See here for an illustration of what we mean with reference to the S&P 500 monthly chart.

If news remains quiet, that pullback will likely move at the slow, leisurely pace of the prior weeks' rally.

Disclosure/disclaimer: No positions. The above is for informational purposes only. All trade decisions are solely the responsibility of the reader.