Good morning! The market experienced an active session on Friday, but most of the activity was in the morning. The jobs data kept traders busy speculating, but the market was rather sloppy for most of the day. An initial gap lower filled and then quickly fell off prior 5 minute highs in the S&P and Dow, as well as the Nasdaq's 5 minute 20 sma at the 9:45 ET reversal period.

The selling increased into 10:00 ET, but then slowly reversed into the lunch period. The strong volume into 10:00 ET flushed out the bears that had been at the helm since Thursday morning. The difficult part of the reversal came from the fact that while the market was able to begin its turn-around gradually, it offered little opportunity to catch a continuation pattern once the buying began. Instead of creating a Phoenix or any Bull Flags or such to give an intraday setup for further upside, the momentum built upon itself, culminating in an upside surge into 11:30 ET.

The market had a difficult time for the remainder of the day. After such a sharp move, the indices were unable to again turn quickly back into lows, but it would still take quite some time to correct from the rally. Unlike the morning reversal, the market did not have the steady momentum change coming off the prior afternoon highs. Instead there was the change via pattern development, but only on the smaller 1-2 minute charts. A sharp move off highs into the 5 minute 200 sma was followed by a base along that support, which slowed the upside pace, and then it broke lower, increasing the downside pace in the Nasdaq. The S&P 500 and Dow Jones Ind. Ave. had a more difficult time turning back over. My bias was in favor of the market holding the highs and falling into a larger range on the 15 minute charts, but the range also narrowed on the 5 minute charts, leaving the indices choppy into the close and making trading in the indices scalpish at best. 

The Dow gained 29.08 points on Friday, while the S&P 500 climbed 2.55 points and the Nasdaq Composite added 9.67 points. The market had given back more than a half of its morning gains by the close, but still managed to end the week higher by about 1% in all three indices. This morning rally on Friday is going to make things a bit more tough for the bears than they were looking heading into the day. The bias has turned from a bearish one to a range-bound one. That is likely to continue into Tuesday when the Fed makes its policy announcement. The stronger-than-expected November jobs report lends support the belief that the central bank will leave its rates unchanged at 5.25%. Following the Fed, the market is expected to be quite active. A slew of economic data releases will be providing added volatility, as will the quarterly results from GS, LEH and BSC. Also reporting this week are COST, BBY, ADBE, and CIEN.

Economic Reports and Events This Week
Monday: Wholesale Inventories for Oct. (10:00 am)
Tuesday: Trade Balance for Oct. (8:30 am), Treasury Budget for Nov. (2:00 am), FOMC policy statement (2:15 pm)
Wednesday: Business Inventories for Oct. (8:30 am), Retail Sales for Nov. (8:30 am), Business Inventories for Oct. (10:00 am), Crude Inventories for Oct. for 12/8 (10:30 am)
Thursday: Export Prices ex-ag. for Nov. (8:30 am), Import Prices ex-oil for Nov. (8:30 am), Initial Claims 12/9 (8:30 am)
Friday: CPI and Core CPI for Nov. (8:30 am), NY Empire State Index for Dec. (8:30 am), Net Foreign Purchases for Oct. (9:00 am), Capacity Utilization for Nov. (9:15 am), Industrial Production for Nov. (9:15 am)

Key Earnings Announcements This Week
Monday: ALOG, MTN, SORC, SEH, and VRNT.
Tuesday: BBY, DG, GS, ABM, ADCT, CKR, COO, CPII, MATK, and TUTR.
Wednesday: ZOLT.
Thursday: STST, ASFI, BECN, BSC, CIEN, COST, LEH, MGAM, PIR, WGO ADBE, ZQK, TEK, and VSTA.
Friday: No companies are scheduled to report.
Note: All economic numbers and earnings reports are in lines with those compiled by Yahoo Finance and Briefing.com. 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.