The S&P 500 had a terrible first month of the year, but it bumped back all the way to near record highs.

Going forward we have a slew of economic indicators, especially next week. On Tuesday we have the Empire State Mfg Survey and the Housing Market Index. On Wednesday we have Housing Starts, the Producer Price Index, and the FOMC minutes. Thursday we have the Consumer Price Index, Jobless Claims, the PMI Manufacturing Index Flash, the Bloomberg Consumer Comfort Index, and the Philly Fed Survey. Lastly, on Friday we have Existing Home Sales. To see a calendar of these events, go here.

Although the economy is looking up, corporate earnings have a long way to go to support current stock price levels. The Shiller P/E ratio is over 50% higher than its historical average, indicating stock price levels are much higher in relation to corporate earnings.

There are some notable improvements, however, such that M&A activity is picking up speed. Employment remains weak, but jobless claims are falling, which is a positive indication. Overall, the future looks bright, but Federal Reserve tapering could keep the market at bay for the first half of 2014.

Where do you think the market is heading? Is the stock market correction over? Is the January effect going to come true?