3 Things to Watch This Week

This could be a critical week for the markets, with the S&P 500 (SPX) testing resistance and more than a quarter of its members reporting. Given this backdrop, there are 3 things traders should keep an eye on:

1. Reaction to Bank Earnings - Nearly 1 out every 4 reports will be from the financial sector. Many of these are well-known firms such as Morgan Stanley (MS), American Express (AMEX) and U.S. Bancorp (USB).

Big positive surprises from Goldman Sachs (GS) and J.P. Morgan (JPM) did not move the market last week, and if bank earnings are met again with apathy this week the market will have a hard time sustaining its rally.

2. Semiconductor Earnings - Intel (INTC) caused a surge in the Nasdaq last week, and helped the Philadelphia Semiconductor Index post an upward breakout. Tonight, we'll get earnings from Texas Instruments (TXN). Another positive report -- followed by better-than-expected numbers later in the week from other chipmakers such as SanDisk (SNDK) -- could give tech stocks an additional boost. Of course, Microsoft's (MSFT) report on Thursday could either help or hurt, so be careful.

3. Resistance - The S&P 500 has closed above 946 just once since last November. It will take a continuation of better-than-expected earnings and a positive reaction to those numbers to get and stay above this level. Failure to successfully move above 946 would signal that the markets have yet to move out of their trading range. This, in turn, would give reason to many to continue to sit on the sidelines.

Read the full analyst report on SPX

Read the full analyst report on MS

Read the full analyst report on AMEX

Read the full analyst report on USB

Read the full analyst report on GS

Read the full analyst report on JPM

Read the full analyst report on INTC

Read the full analyst report on TXN

Read the full analyst report on SNDK

Read the full analyst report on MSFT