Good morning! The market was on the choppy side on Friday ahead of the three-day weekend. The bulls continued to hold the reins, however, refusing to give up the gains from earlier in the week and even managing to make some slightly higher highs. The day began with a bit of strength as the indices pulled back into the highs of the trading range that had been in place since late in the morning on Thursday. When this hit at about 10:00 ET, it held extremely well and the market began a pretty rapid pullback, although it was more gradual overall than the rally. It is common for corrections to take the form of two waves. The second one of these came into support at the same time as the 10:45 ET reversal period and it held that level very well.

Although slower than the rally, the pullback was still average to above average. The result was that the bounce off the support was still subject to resistance from the morning highs. The Dow Jones Ind. Ave. was able to outperform the S&P 500 and Nasdaq Composite. It had popped quickly back to the 5 minute 20 sma and then broke out of it quickly despite having underperformed earlier in the session. It was the first to break to new intraday highs. The oil, metals, and energy stocks were continuing to round off at support and saw the strongest upside in nearly a month on Friday, which boosted the Dow and S&Ps but did little to assist the Nasdaq. The Nasdaq felt the weight of a bit of corrective action in the tech stocks that had lead the way earlier in the week.

The three major indices moved steadily higher into the early afternoon, even though the volume began to slow as many market participants began to wind down their week ahead of the three-day weekend. The 13:00 ET reversal period served as highs with The Dow, S&Ps, and Nasdaq all at new intraday highs. The volume continued to drop as the afternoon wore on. The pace was nice and gradual, pulling back slowly into the 15 minute 20 sma support, but when the market attempted to break higher out of the 15:00 ET reversal period, there wasn't enough "oomph" left from the remaining players to get very far and the indices merely managed to pull back up into earlier highs ahead of the close.

Although shortened, this week is anticipated to be an active one with numerous economic releases and earnings news to attract market participants. Tech stocks are likely to be of particular interest due to earnings announcements from Apple Computer Inc. (AAPL), International Business Machines Corp. (IBM), and Intel Corp. (INTC). The financial sector is also going to be very active. J.P. Morgan (JPM), Citigroup Inc. (C), Merrill Lynch & Co. (MER), and Washington Mutual Inc. (WM) also report during the week ahead.

Currently the bias for the market is bullish, but the indices have been moving higher for several days already, so some nice corrections on the 30 minute charts would help lower risk on intraday buy setups. Otherwise the shorter time frames will hold the least amount of risk intraday. Those with the greatest risk will be the ones that have rallied for 2-3 days, holding the 15 minute 20 sma support into the weekend. They will most easily correct into Tuesday. A couple of stocks I will be watching for more upside this week will be GE, BNI, NSC, and JBHT.

Economic Reports and Events This Week
Monday: Closed
Tuesday: NY Empire State Index for Jan. (8:30 am)
Wednesday: Core PPI, PPI for Dec. (8:30 am), Net Foreign Pruchases for Nov. (9:00 am), Capacity Utilization and Industrial Production for Dec. (9:15 am), Crude Inventories 1/12 (10:30 am), Fed's Beige Book (2:00 pm)
Thursday: Building Permits, Core CPI, CPI, and Housing Starts for Dec. (8:30 am), Initial Claims 1/12 (8:30 am), Leading Indicators for Dec. (10:00 am), Philadelphia Fed. for Jan. (12:00 pm)
Friday: Mich. Sentiment-Prel. for Jan. (10:00 am)

Key Earnings Announcements This Week
Monday: Closed
Tuesday: AMTD, CBH, CBSH, FRX, INVX, MI, MNRO, PVTB, USB, WFC, FUL, INTC, LLTC, TSS, and TRMK
Wednesday: APH, AMR, ASML, CIT, FCX, JPM, LEN, MEL, NTRS, PH, PGR, LUV, STT, WIT, SNV, DOX, AAPL, CLC, FHN, IBKC, LRCX, NVEC, SOV, and WM
Thursday: AIT, BK, BBT, BG, CHZ, CMA, CAL, FITB, HOG, HBAN, IGT, JEF, NITE, LOGI, MMR, VIVO, MER, NVS, PPG, SLM, SMTS, UNH, USAP, CAMD, COF, CREL, CREE, DGII, ETFC, FNB, IBM, ICOS, MOLX, PNFP, and XLNX
Friday: ACO, C, FAST, GE, JCI, KEY, MOT, JNC, RF, SAY, SLB, STI, and WL
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.