Good morning! Volume was heavy on Thursday as volatility remained high. The Nasdaq Composite continued to feel extreme pressure from tech weakness, exacerbated a disappointing earnings forecast by Apple Inc. (AAPL). The Nasdaq had the weakest day of trading since last November, falling 36.21 points, while AAPL alone lost 5.88 points, or 6.3%. The Dow Jones Industrial Average held up the best, losing only 9.22 points, while the S&P 500 lost 4.25 points.

The morning began on Thursday with the Nasdaq gapping down and the S&Ps and Dow gapping higher. The first 30 minutes of the day saw little activity, but selling hit hard out of 10:00 ET. It only lasted for 15 minutes, however, before the indices ran smack into strong price and moving average support at the 10:15 ET reversal period. The Dow hit the prior day's lows, while the S&P 500 came into its 5 minute 200 sma support and the Nasdaq pullback back into the trading range from two weeks ago.

The S&Ps and Dow corrected off the lows by more than 50% throughout the remainder of the morning, but the Nasdaq was unable to pull up off its morning lows at all and hugged them into noon, forming a nice breakdown pattern out of the 12:00 ET reversal period. The pace was slow to begin with, but the selling was steady going into the last hour of trading. The slower pace and greater overlap in prices from bar to bar on the 5 and 15 minute charts increased the risk for daytraders. Support hit as the Nasdaq came into its 20 day sma and the Dow and S&Ps again tested morning lows. The market bounced a bit, but held close to lows heading into the close. 

Friday will be a lighter news day for a change from the action so far this week. The bias remains a bit more on the bearish side on the daily charts, but intraday it's still going to be easy to just see a continuation of the choppy action that's been in place since Tuesday. I would use a lot of added caution on longs though.

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.