Welcome back to slow summer trading days. I hope everyone had a great Fourth of July weekend. I was happy the sun decided to show up in New York City after going missing for the entire month of June.

Was it just me, or did today feel like traders were nursing hangovers from the weekend?

Hangover or not, today’s news flow was very light. The biggest story of today was the sell-off in commodities, most notably crude oil, which was off by 2.5%. This led to a sell-off in the oil names: Transocean (RIG), Schlumberger (SLB), Encana (ECA), and BP (BP). I find this interesting, since the commodity is off almost 10 points from its year-to-date high of $72. And last summer, oil’s decline was a prelude to the equity market's decline.

The S&P 500 closed the day at 898, up 0.26%. The market whipsawed back and forth on its way to an eleventh-hour rally. Two stocks that stuck out were Goldman Sachs (GS) (up 2.07%) and Bank of America (BAC) (down 3.89%). Keep your eye on these 2 as the week unfolds.

There’s been a lot of talk about the head-and-shoulders pattern emerging in the S&P 500; as Professor Jeff Cooper noted:

“There is some chatter over the weekend and this morning that the head and shoulders is so obvious that it may be unwise to trust it. Hence the thinking is that with the neckline broken in the futes, the shorts could get squeezed prior to going lower.

“While the market is always subject to squeeze, rinse, and wash, my rule of thumb is to believe what you see and not try to get too cute and over-think.

A smart man said that while the market may set up a multitude of opportunities and trades any given day, trying to take too many trades will grind down your profitability. In other words, the correct stance may be to focus on a handful of solid setups as the more decisions you make as the day goes on often equates to the more ways of being wrong and ruining a good morning. No one can call all the wiggles and see through all the noise.”

The set-ups Professor Cooper mentions will emerge via the Treasury's 4 bond auctions this week, one of which has already occurred. This is more auctions than have occurred in a single week since 1976.

Another potential catalyst is the G8 meeting, which will begin this Wednesday. Once it gets underway, expect to hear some talk about replacing the dollar as the reserve currency. The final catalyst will be earnings season, which also kicks off on Wednesday with a report from Alcoa (AA).

As for tomorrow, it will be the lightest day of the week in terms of the trading radar.

Have a great night, Minyans!