Good morning! The bears reared their heads in a rather ugly fashion on Friday. The concerns I had going into the bullish action this year came to pass with a very significant decline at the end of past week. All in all, it was one of the largest one-day losses since Sept. 2003 with the Dow Jones Ind. Ave. hitting negative levels on the year. While there are a lot of stocks coming out with fourth-quarter earnings reports for last year, outside pressures were also at play last week. A new al-Qaeda tape attributed to Osama and Iran pushing for nuclear capabilities set oil prices ablaze. It wasn't a pretty picture.

As of Friday, 58% of the 95 S&P500 companies that had reported earnings beat the analysts' estimates with 24% falling below. Nevertheless, the day began on a weak note when the base into Thursday's close along the 15 minute 20 sma gave way. This triggered an Avalanche short pattern almost immediately out of the open. It was a slow start due to 5 minute 200 sma support, but the selling picked up around 10:00 ET and continued steadily throughout the day.

Volume was strong throughout as most stocks sold off. If you look at the 5 minute charts you can see spikes that indicated short term exhaustion moves. These were enough to stall the market at key reversal zones, such at 10:45 ET, noon and 14:00 ET. No correction from support, however, was able to break the 5 minute 20 sma with any strength. They didn't even try until late afternoon, but the slowing pace in the market never saw any reversal in pace. The upside moves paled in comparison to the selloffs, even coming out of 14:00 ET, which tends to be the strongest afternoon reversal zone of the day.

The market closed near the lows on Friday. This selling doesn't show any sign of reversal action going into Monday. It was such a strong downside move that it makes continued selling at a similar pace rather difficult, but I'd like to seem some slowing down of the selling intraday to allow for corrective action off daily support levels. These fall primarily at prior lows on the daily charts and at the 50 day sma support, which is very close in the Dow. This can be enough to allow for a bit of relief on Monday. My longer term outlook on the market remains unchanged from recent action. This is pretty normal action given the placement of the early January breakout attempt as compared to the rally of last October-November. In order for that upside to continue off support such as the 20 week sma, we need the downside action to start to turn over and again favor the bulls, but this would likely occur more gradually initially than the descent.

Economic Reports and Events
Jan 23: Leading Indicators for Dec (10:00 am)
Jan 24: -
Jan 25: Crude Inventories 01/20 (10:30 am)
Jan 26: Durable Orders for Dec (8:30 am), Initial Claims 01/21 (8:30 am), Help-Wanted Index for Dec (10:00 am)
Jan 27: Chain Deflator-Adv. For Q4 (8:30 am), GDP-Adv. For Q4 (8:30 am), New Home Sales for Dec (10:00 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 23: AXP (?), ACF (A), ARBA (A), AV (A), BAC (B), CBST (A), ET (A), ETN (B), F (B), MSPD (?), PPC (B), SKM (3:00 pm ET), TXN (A)
Jan 24: MMM (B), ADTN (?), AGR (?), AAI (B), AKS (?), BJS (?), EAT (B), BNI (B), CA (?), CTX (A), CKFR (A), COH (B), GLW (A), CSX (?), DD (B), EMC (B), EXTR (A), GDW (?), HMA (B), JNJ (B), KMB (B), LAB (B), LXK (B), LU (B), NFLX (?), NOC (B), PPP (?), RFMD (A), RYL (A), STLD (?), STM (A), SUNW (4:30 pm ET), NYT (B), TMA (A), TDW (B), UTX (B), ZION (A)
Jan 25: ABT (B), APD (B), ATI (B), ALTR (?), AHC (B), ABC (B), AMTD (?), AMCC (A), ASH (08:00 am ET), ADP (B), AVT (?), BLS (B), BMY (?), ELY (A), CHIR (4:45 pm ET), CRUS (A), CL (?), CNXT (?), COP (?), DRE (A), EXC (B), FIC (A), FBN (?), GD (B), HRS (A), HXL (A), INGR (A), IFIN (A), JNPR (?), KOMG (?), LEA (B), LSI (?), MXIM (A), NYB (B), NCX (B), NVLS (?), PMTC (B), PMCS (A), PLCM (?), PX (B), QCOM (?), ROK (?), SAP (B), SLAB (B), SSTI (A), SWKS (A), SSCC (B), STJ (?), SWFT (A), HSY (B), MHP (B), VAR (A), WLP (06:00 am ET), XRX (B))
Jan 26: AFFX (?), ALK (?), AMGN (08:00 am ET), ANDW (?), T (07:30 am ET), AVID (A), BAX (?), BEBE (?), BDX (B), BOW (B), BRCM (A), BC (B), CAH (B), CAT (B), CLS (?), CELG (?), CPWR (A), ED (?), CY (B), DHR (B), DTAS (A), D (B), DOV (A), DJ (B), EMN (A), LLY (?), ELX (?), EQT (B), FII (4:00pm ET), FDC (?), FDRY (A), BEN (?), GM (B), GNTX (?), GFI (?), HIG (A), HON (B), ICOS (?), NDE (B), INFA (A), IR (B), IDTI (A), IRF (A), JNS (B), KEM (B), KLAC (?), KLIC (B), LSCC (A), LEG (A), LMT (B), LYO (B), MRO (?), MEE (A), MCK (A), MWV (B), MENT (A), ,SCC (?), MSFT (?), MLNM (B), NWL (B), NE (B), NOK (?), ORI (?), OPWV (?), PKTR (A), PLAY (A), POT (?), DGX (B), RBAK (?), COL (B), SNDK (A), SHW (?), SO (B), SYK (A), SU (?), TLAB (B), TEN (B), DOW (B), TSM (08:00 am ET), UIS (B), UPS (B), VSEA (A), VRSN (?), VZ (B), WDC (?)
Jan 27: BDK (B), CVX (B), FPL (?), HAL (?), MAN (B), NUE (?), PG (B), UCBH (?)
Jan 30: ATHR (4:00 pm ET), CHKP (B), CMI (B), EK (B), XOM (?), FISV (A), KFT (A), MAT (B), RSAS (A), SGP (B), SII (B), SYY (?), TSN (B), UNM (A), ZMH (A)
Jan 31: ACE (A), ADPT (?), ASD (B), ARTG (?), CCJ (?), CB (A), CIN (?), CEG (?), CAM (B), COCO (B), CFC (B), CYMI (A), ELN (B), ETR (B), FLEX (A), GOOG (?), HLT (B), ITW (08:00 am ET), RX (B), ISSX (A), JBLU (B), K (B), MRK (B), SEPR (B), SIE (A), SGTL (A), STN (?), SYMC (?), TE (B), ERICY (01:30 am ET), ALL (A), X (?), VLO (?), WYE (?), ZHNE (A)
Note: All economic numbers and earnings reports are in lines with those compiled by Yahoo Finance. Occasionally changes will occur that are made after the posting of this column.

Toni Hansen is President and Co-founder of the Bastiat Group, Inc., and runs the popular Trading From Main Street. She can be reached at Toni@tradingfrommainstreet.com.