Good morning! The market held within our outlook pretty well on Wednesday. Following last week's strong upside move, the indices have continued to creep higher, but there has been a great deal of overlap and choppy action intraday. It's been a pretty slow week for me as a result.

The trading channel was the most narrow throughout the morning. The indices pulled back into the 5 minute 20 sma support in the first half hour of the day before making new highs. From that point on they held the trend channel that began on Tuesday with the 200 sma on the 5 minute charts intraday serving as support.

This range began to narrow going into noon. After three waves of buying, which had only slightly higher highs with each move, the indices had a stronger correction off those highs into 13:00 ET. This still held that 5 minute 200 sma support in the S&P500 and Dow Jones Ind. Ave, but it slowed the upside moves intraday to an even greater degree.

The last several hours of the session on Wednesday consisted of a very slow uptrend on the 2-5 minute charts. This led to a breakout on the 15 minute time frame, but the pace increased the risk that a reversal off highs could again be very rapid, giving back all gains in a matter of minutes. Coming out of the 15:00 ET reversal period the market began to show this potential even more by showing signs of stronger corrections from the highs of the trend channel as compared to off the lows. There wasn't much time left in the day though and the 15 minute charts still hadn't been forming much for reversal patterns, so the correction from late day highs only lasted for the last half hour of the day and was relatively mild.

Not much as changed as far as my bias goes heading into Thursday. We still aren't seeing decent reversal patterns form on the intraday charts. This means we still have more potential for this type of action continue again on Thursday. Risk will also continue to increase for a stronger late day reversal unless the pace on the upside intraday can manage to pick up.

Economic Reports and Events
Jan 12: Export Prices ex-ag. for Dec. (8:30 am), Import Prices ex-oil for Dec. (8:30 am), Initial Claims 01/07 (8:30 am), Trade Balance for Nov. (8:30 am), Treasury Budget for Dec. (2:00 pm)
Jan 13: Business Inventories for Nov. (8:30 am), Core PPI for Dec. (8:30 am), PPI for Dec. (8:30 am), Retail Sales for Dec. (8:30 am), Retail Sales ex-auto for Dec. (8:30 am), Mich. Sentiment-Prel. for Jan. (9:50 am)

Earnings Announcements of Interest
Only stocks with an average daily volume of 500K+ are listed. List may not be complete so be sure to always check your stock's earnings date before holding a position overnight. (A) = Earnings after the close, (B) = Earnings before the open, (?) = Earnings time not specified at the time of this writing
Jan 12: MI (?), MTG (B), MOS (?)
Jan 13: -
Jan 16: AAPL (A)
Jan 17: ASO (B), CAL (B), INTC (?), MEL (?), SOV (A), WFC (B)