It’s likely to be another volatile week on Wall Street as a number of key economic reports will certainly have an impact on the market. Although the economy is chugging along, in order for the market to break through key resistance levels, the housing market will need to improve before a rebound in the economy can be considered a success.

The housing market takes center stage on Monday with Existing Home Sales. The key will be the supply numbers for unsold homes. Sales of existing homes in the US went down by 2.04% last month (from May to June), to 4.86 million homes.

New Home Sales come out on Tuesday. Sales of new homes fell less than expected last month but inventory keeps declining which is not a good sign. New home purchases dropped 2% in the South and fell about 1% percent in the West while sales rose a little over 5% in the Northeast and 2.5% in the Midwest. These two reports will likely set the tone of the market for the rest of the week. Consumer Confidence will also be released on Tuesday.

Wednesday brings the Durable Goods report. Durable goods are an indicator of the number of new placed with domestic manufacturers for immediate and future delivery of factory hard goods. This report is an early estimate and is revised a couple of weeks later for a more accurate and complete report. New orders for durable goods were pretty strong last month, as we witnessed a 0.8% jump in June.

Thursday is Gross Domestic Product (GDP) and Jobless Claims. GDP is the best measure of our economic activity and encompasses every sector of the economy. GDP growth is expected to be revised up to 2.7% annual growth from an estimate of 1.9% which would normally mean good news. However, most of the growth is coming from outside the US. Although the job market is improving according to some economists (sly grin), we have gone five straight weeks with claims levels above 400,000. Until we get back under that number there is no improvement.

On Friday we get Personal Income and Outlays, and the Consumer Sentiment report which is directly related to the strength of consumer spending. These two reports will either save the market or add to its misery by the time the long holiday-weekend approaches.

Rick Rouse