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U.S. stocks moved toward a key test today with the Standard & Poor’s 500 approaching the 2550 to 2600 level that signals the top of the recent volatility range and likely technical resistance. If the index breaks above this level, the market could run higher for a while. If it fails at this level, we could see a retest of the January 3 low at 2447 or the December 24 low of 2351. (The S&P 500 closed at 2546, up 0.70%, today.)

You could make just about any argument you wanted out of today’s market action.

There were stocks showing a continuation of Friday’s move upwards as short sellers continued to buy shares to cover their positions. For example, heavily shorted Nvidia (NVDA) was up 5.29% today and Nektar Therapeutics (NKTR) jumped another 7.83%. Those gains are significant because both stocks face big fundamental uncertainties that have made them favorite targets of short sellers.

There were stocks climbing strongly as some investors and traders turned to anticipating the fourth quarter earnings season that begins next week. Amazon (AMZN) was ahead 3.44% and Netflix (NFLX) gained 5.97%.

And other big gainers from Friday looked to have exhausted the immediate fuel of their advance. Boeing (BA) was ahead only 0.31% and Caterpillar (CAT) climbed just 0.06%.

The market’s Friday bounce has priced in some of the potential good news that might drive stocks higher from here. Fears of a recession retreated with the addition of 312,000 jobs in December. (That’s a number that should be treated with some care since seasonal adjustments to account for holiday hiring have historically made this report volatile.) Hopes for a solution to the U.S.-China trade war rose as negotiations resumed this week. Investors and traders priced in a shift in Federal Reserve policy that would result to no interest rate increases in 2019. And some on Wall Street started to speculate on the possibility that earnings for the fourth quarter could come in above expectations.

But with that “pricing in” some investors and traders have, apparently from today’s market action, decided that they would like to see some of these possibilities turned into concrete news before paying up for stocks at this level. Which makes the market very dependent on news good, bad, or indifferent, at this level.

The Dow Jones Industrial Average closed up 0.42%. The NASDAQ Composite was ahead 1.26%. The small cap Russell 2000 moved up 1.78%. The iShares MSCI Emerging Markets ETF (EEM) was higher by 0.23%.