(PRO Views is exclusive to PRO subscribers and gives you insight into the day’s news straight from real investing pros. See the full discussion above.) Whether the S&P 500 can maintain its 20-day moving average after Friday’s decline and Monday’s recovery will be critical to the stock market’s near-term outlook, according to Jay Woods of New York Stock Exchange Insider. Friday’s stock price closed below its 20-day moving average of 6,667 shares, marking the fourth time since mid-April. “Will the previous support become resistance and the next step will be further down or sideways?” Woods asked before the market opened on Monday. Ultimately, the S&P 500 on Monday recouped more than half of Friday’s losses, closing at 6,655. (Watch the full video above.) For now, Woods said if the 20-day moving average level is not regained soon, or if stocks continue to decline, he will next look to see if the market holds ground above the S&P 500’s 50-day moving average. Another signal traders will be watching this week is the CBOE Volatility Index, which soared to 22 at one point on Friday. Stocks opened at record highs on Friday ahead of President Donald Trump’s social media messages threatening to raise tariffs on China in response to export restrictions on rare earth minerals. “The president really moved the volatility,” said Woods, chief market strategist at Freedom Capital Markets. “Just like we got through the tough months of August and September, we got through October just fine. Well, October brings volatility.” The heated rhetoric on trade subsided after President Trump posted again on social media on Sunday, saying “everything will be fine” in Sino-US trade relations, and stocks rose on Monday, with the VIX falling to a range of 18.6 to 20.8. @VX.1 5D Mountain CBOE Volatility Index for the Past 5 Days There’s more to Woods’ focus this week. JPMorgan and other financial institutions will begin their third-quarter results on Tuesday. JPM is up 25% year-to-date heading into Monday’s trading, and being the nation’s largest bank will be important. Chief Executive Jamie Dimon is “a little bit more pessimistic than the optimism you typically see in earnings reports. His doom and gloom usually bodes well for the market. Let’s see what he has to say,” Woods said. Other financial stocks scheduled to report this week include Citigroup, Wells Fargo, Goldman Sachs, Morgan Stanley, and large regional banks. Regional banks continue to lag, but mergers and acquisitions, such as Fifth Third’s planned takeover of Comerica, are starting to return, Woods said, noting that investors will listen closely for consolidation cues on conference calls with management. There’s also revenue from transportation companies, from United Airlines to freight rail carrier CSX to truck driver JB Hunt. This year, transportation was delayed, resulting in a 5% drop. “Let’s see if there’s an upturn there,” Woods said, adding that if the economy continues to expand, “that’s where we want to see it.” Three companies in the Dow Jones Industrial Average – Johnson & Johnson, American Express and Travelers – are also scheduled to report earnings this week. Travelers has tracked roughly the same pace as the S&P 500 so far this year. “Let’s see what they think if they can continue this upward trend,” Woods said. “This is not tech week. It’s about infrastructure. It’s about the industries that are basically the backbone of America,” he said. (This weekly Monday video is exclusive to CNBC PRO subscribers.) Correction: A previous version misspelled Jay Woods’ last name.
