Good morning! After some very strong trading last week, things slowed down a great deal on Tuesday to start off the shortened trading week. Although the futures were trading higher in the afterhours, the market still opened pretty close to the prices from the end of the day on Friday. The market pulled lower off premarket highs, had some congestion to slight upside out of the open and then continued with a second wave of selling on the 5 minute charts. The selling continued with a third wave into 11:00 ET, although the action remained choppy and the indices only managed to make it back into the prior afternoon lows.

The market held the 11:00 ET reversal period very well, pulling higher into the early afternoon. Volume declined throughout the correction off lows, finally running its course at 12:30 ET. At that point the 5 minute trend channel broke down and the indices made their way back to morning lows. The support and resistance levels held very well on Tuesday despite the added chop and reversal periods also held nicely. On the afternoon breakdown the 13:00 ET reversal period helped continue the move lower, lasting until the 14:00 ET reversal period when the market hit those morning lows.

The market bounced quickly off the mid-afternoon lows, but as with the prior action intraday, there was a lot of chop within the move itself and it only managed to make it back into the prior highs intraday before stalling again. The Dow saw the most strength, managing another continuation into the close, but the Nasdaq pulled back into the lower channel support before correcting off it a bit into the last 30 minutes.

The volatility is likely to remain high throughout the rest of the week. With numerous earnings and economic reports due out, things are going to get whipped around quite a bit. This was the case on Tuesday where the overall market had a tough time and moved back and forth a lot, but many individual stocks still established strong intraday trends to offer a lot of setups, even though they were a bit more risky overall than last week.

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 Purchases 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.