Stocks closed narrowly mixed with the Dow up 0.09%, while the S&P and Nasdaq were down -0.12% and -0.10% respectively. Interestingly, the small-cap Russell 2000 closed up by an outsized 1.01%.

After last week's much better than expected employment report, which capped off a fantastic seven weeks for the market since the June lows were put in, stocks were searching for direction to start this new week.

We are likely to get it come Wednesday (8/10) when the next Consumer Price Index (CPI) comes out showing whether inflation has finally peaked or if it's still climbing.

After the previous week's FOMC Announcement when the Fed raised rates by 75 basis points, there has been a growing belief that the Fed might slow their pace of hikes down, essentially saying they will refrain from forecasting how big they'll go at their next meeting in September, and saying they'll look at the data at that time and make the decision then.

Although, last Friday's blowout jobs report have some people now rethinking that notion.

To illustrate the whipsaw in rate expectations, prior to Friday's jobs report, traders had only placed a 34% chance that the Fed would raise rates by 75 basis points at their next meeting in September. But after the numbers came out, that soared to nearly a 70% chance of a 75 bps rise, and a virtual certainty of at least 50 bps.

So Wednesday's inflation report could give us some indication as to which way the Fed will go. So all eyes will be on that report. It comes out on Wednesday, August 10^th, at 8:30 AM ET.

In the meantime, earnings season continues. And so far, it's been a solid one.

Even though more than 87% of the S&P has already reported, there's plenty of other socks on deck waiting to do the same this week. In fact, we've got another 460 companies reporting today, and a total of 1,425 between today and Friday.

Since the June lows were put in, the Dow is up by 9.71%, the S&P is up by 12.9%, and the Nasdaq is up by 18.8%.

The major indexes are still down by double digits. But it's been a fantastic rally so far.

Once the indexes are able to close up by 20% or more from their lowest close, that's when the bear market will officially be over, and a new bull market will officially begin.

So there's still quite a bit of work to do on that front.

But hopefully you're taking full advantage of this rally.

See you tomorrow,