Good morning! Wednesday's session began with light trading, near the prior day's closing prices. It remained slow throughout most of the day, but particularly during the morning as the indices fell into a narrowing trading range. The momentum intraday was initially indifferent with comparable pace as the indices retested Tuesday's highs as they had on the pullback from them the prior afternoon. That changed, however, following 10:00 ET. The resistance held extremely well, although the Dow Jones Ind. Ave took a little bit longer until it was able to retest those highs into 11:00 ET.

The market pace remained without bias as the indices again pulled back into their 5 minute 20 simple moving average support. At this point, however, the volume decreased significantly mid-day and the momentum finally began to turn. The indices were now forming a symmetrical triangle intraday and began to hug the lower trend channel from that triangle over noon. This moved the bias to favor the bears and a breakdown into the early afternoon. The momentum continued to build on an initial breakdown at 12:30 ET, although it was short-lived.

The indices formed a solid 5 minute bear flag from 12:30-13:00 ET. Once again, volume remained light as the indices consolidated, adding strength to the bear formation. It triggered off the 5 minute 20 sma and out of the 13:00 ET reversal period, leading to the strongest move of the session and taking the market back into support from the prior morning in the Nasdaq and S&P 500 and the morning lows in the Dow, which also corresponded to its 5 minute 200 sma support. Although this selling was the strongest activity of the day, the volume was much lighter than usual, giving us an indication that many market participants were already beginning to call it a week.

For the next two hours after hitting that strong mid-afternoon support, the market corrected slowly off the lows, pulling up slightly but again on light volume. Action was choppy and the 15 minute 20 simple moving average served as resistance, leading to one last minor selloff ahead of the close as the last reversal period of the day hit at 15:30 ET. The Dow ($DJI) ended up closing lower by 7.45 points on Wednesday, while the S&P 500 lost 2.02 points and the Nasdaq Composite fell 1.94 points.  We should continue to see volatility dry up over the next two sessions. There is a slightly more bearish bias forming within the daily range at present, but I would tread lightly.

Note: Tomorrow's column will be my last until the New Year since I will be heading back up north for the holidays. I hope you have, or continue to have, a wonderful holiday season!

Economic Reports and Events This Week
Monday: Current Account for Q3 (8:30 am)
Tuesday: Housing Starts, Building Permits, PPI, and Core PPI for Nov. (8:30 am)
Wednesday: Crude Inventories 12/15 (10:30 am)
Thursday: GDP-Final for Q3 and Chain Deflator-Final for Q3 (8:30 am), Initial Claims 12/16 (8:30 am), Leading Indicators for Nov. (10:00 am), Philadelphia Fed for Dec. (12:00 pm)
Friday: Durable Orders, Personal Income and Personal Spending for Nov. (8:30 am), Mich. Sentiment - Rev. for Dec. (10:00 am)

Key Earnings Announcements This Week
Monday: JOYG, SCS, APSG, FCEL, HOV, and ORCL
Tuesday: CC, FDS, MCS, MS, SCHL, CHAP, CBK, CTAS, DRI, FSII, PALM, and SMOD
Wednesday: AIR, ATU, BMET, KMX, FDO, COMS, ACN, APOG, BBBY, COGN, FINL, MLHR, NKE, and PAYX
Thursday: AGE, AM, CCL, CMC, CAG, GIS, NOBH, RAD, SMSC, WOR, EGLS, RHT, RIMM, RECN, SHFL, SLR, and TIBX
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.