The Sign Wall Street Really Wants to See: 'Help Wanted'

The third and final peak week of second-quarter earnings season is finally, blessedly, upon us. Another 103 S&P 500 ($INX) companies and three Dow components will release results in the days ahead.

But if stocks have any hope of breaking out of their range-bound rut, the market will need to see a consistent drop in weekly jobless claims, says Kenny Polcari, managing director at interdealer broker ICAP Corporates, from the floor of the New York Stock Exchange (NYX).

True, the Dow Jones Industrial Average ($INDU) and S&P 500 each gained 7% in July to mark their best monthly performance in a year, thanks to better-than-expected bottom lines. And sure, the first trading day of August has been a boon to the bulls. But stand back a bit, and you'll notice that stocks have been stuck at 1,100 on the S&P 500 for months.

That's because traders and investors are just plain confused, Polcari says, as bulls and bears try to square the sharp recovery in corporate profits with a mishmash of economic data that's pointing to slower growth. In Polcari's view, the market won't make a decisive move up until those Thursday weekly jobless claims numbers (which are themselves stuck at 450,000 to 500,000) start dropping consistently.

"The initial weekly jobless claims number has got to break to the downside before the market gets a real positive sense that we are making progress on the recovery front," Polcari says. "Until we get real jobs growth, I don't think we're going to see a move that takes the market through that resistance level."

For more on Polcari's take on equities from the floor of the NYSE, see video.