Good morning! After an active, but choppy, week of trading, Friday ended on a sour note. The 8:30 am ET jobs data had a lot to do with it. Hourly wages rose, while the U.S. unemployment rate fell to a 5-year low. This created concerns that the Federal Reserve would continue to raise rates in the foreseeable future. Disappointing earnings from the likes of Google (GOOG) and Amazon.com (AMZN) also influenced investors. The majority of the action came in the form of a strong downside gap in the indices.

As discussed in last Wednesday's column, larger gaps in the market as a whole have a much more difficult time leading to continued selling intraday. Since Friday's gap was the second one in the same week, however, it had a more of a problem bouncing back than it did earlier in the week. The pace within the range remained stronger on the upside than the downside throughout the morning and into the early afternoon as a result of the larger gap, but the NASDAQ was not able to break out of the morning range. The S&P500 and Dow Jones Ind. Ave. did manage to put in a nice move into the 13:00 ET reversal period though. After basing along the 15 minute 20 sma resistance, both indices managed to fill the morning gap around 13:30 ET. This was strong enough that the level held and the market began to roll back over as the afternoon progressed.

Due to the stronger mid-day rally, the bears were unable to adequately regain control into the close. The pace did manage to pick up a bit on the downside after 14:00 ET, but this decline just took the NASDAQ back to morning lows and the S&P500 and Dow back into prior 5 minute lows.  At that point all three fell into a more narrow range into the last 90 minutes of the day. With action like this, that last thirty minutes will typically bring in more selling. While that occurred on Friday as well, the move was brief, bringing the S&P500 and Dow back into morning lows and the NASDAQ to new intraday lows. When the S&P500 and Dow hit their support, however, the selling ended.

I didn't find much when scanning over the weekend on the daily charts for new setups heading into this week. What did stand out was the fact that many of the stronger stocks over the last couple of weeks really slowed down their upward momentum as the weekend approached. This seems to suggest that we will see further downside this week.  With so many stocks coming off 52 week highs, there are a lot of support levels they will be running into as they decline, so my primary focus will be on shorter term daytrades. Adding to the potential on the downside is the lack of significant economic data due out this week and the end of earnings season. This means that the market will not have much opportunity for advancement based on news events and there will be very little to drive the market higher.

Economic Reports and Events
Feb. 06: -
Feb. 07: Consumer Credit for Dec (3:00 pm)
Feb. 08: Crude Inventories 02/03 (10:30 am)
Feb. 09: Initial Claims 02/04 (8:30 am), Wholesale Inventories for Dec (10:00 am)
Feb. 10: Trade Balance for Dec (8:30 am), Treasury Budget for Jan (2:00 pm)

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
Feb. 06: ATVI (A), APC (A), ANAD (B), CNET (A), DIOD (A), FLS (B), FMC (A), GDI (A), HAS (B), HEW (B), HUM (05:00 am ET), IPS (B), XXIA (A), JP (A), JCOM (?), LPNT (A), LPX (?), NBR (A), NSR (B), PPS (A), GOLD (2:00 AM ET), PYX (A), RCII (A), RSG (A), RYAAY (2:00 AM ET), SPG (B), TIN (B), PFG (A), UDR (A), DIS (?), YUM (A)
Feb 07: ARDI (A), AL (?), ALKS (?). AMX (A), APC (B), ATSN (7:00 AM ET), AXS (A), BRL (B), BHE (B), BMC (A), BSX (B), BP (02:00 am ET), CELL (A), CHRW (?), CNC (B), CSCO (?), CSC (A), BGC (A), EMR (B), FSH (A), FO (?), ICOS (?), IMMU (A), KB (B), LVLT (?), MHX (B), NAVR (A), OXY (B), OIS (A), OSTK (B), PFGC (B), PSD (A), RGC (B), RL (08:00 am ET), RNR (A), CAKE (A), KO (B), PMI (?), TM (?), UPL (A), UARM (B), VRTX (A), VSH (B), WWY (?)
Feb 08: AKAM (?), ALVR (B), AMKR (A), APPB (A), RMK (B), ARI (A), ARRS (A), AUO (?), AVNX (A), ACLS (A), CI (?), DF (B), DO (?), EDMC (A), EDS (A), ENER (A), ERES (A), FNF (A), FLIR (B), GGB (B), GSK (07:00 am ET), GRP (B), IACI (B), MVK (A), MOGN (?), MPS (B), NFG (A), NWS (A), PEP (B), PXD (B), PRU (A), QSFT (?), RAI (?), SBGI (B), SNWL (A), DTV (B), WFMI (A), WSH (A), XTO (?)
Feb 09: AET (B), AG (?), AW (A), AMLN (A), ADI (A), AOC (A), AIV (B), AIZ (B), ALV (06:00 am ET), AN (B), BWA (?), BORL (?), BYD (A), BG (B), CPST (A), CEM (A), CCE (B), CTSH (B), ELNK (07:00 am ET), HGSI (B), LGF (A), MAR (B), MBI (B), MFE (?), MET (A), NFX (B), NFI (A), OSUR (A), PNRA (A), SKYW (?), TELK (?), TRA (?), TQNT (A), TRZ (B), UNTD (A), UTSI (A)
Feb 10: AU (?), ACI (B), CHB (B), CBB (B), CVH (?), ECL (B), IIJI (?), VC (B)
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.