Good morning! The Dow had its best day of the year thus far, at one point gaining more than 100 points before closing with a gain of 98.38 points. The S&P 500 also did well with a gain of 9.42 points, while the Nasdaq lagged a bit, closing higher by 15.29 points, but -0.1% less than the S&P's 0.7% gain.

The morning did not start off as brilliantly, however, moving lower out of the open for the first 20-30 minutes. The indices found strong support at the S&Ps 5 minute 200 sma, the 20 sma on the 5 and 15 minute charts of the Dow, and some prior lows in the Nasdaq and by 10:00 all was forgiven and the buyers once again returned. All three indices managed to make slightly higher highs than in the prior session, but held the general resistance from Tuesday's highs heading into the 10:45 ET correction period. The Nasdaq Composite hit its 15 minute 200 sma at the same time and that also helped rein in the bulls.

As with nearly every FOMC meeting day, the market's volume dropped off substantially in the latter half of the morning and into mid-day. The indices retraced from their morning highs, forming a slight Avalanche along the 5 minute 20 sma and then heading even lower, albeit at a slower pace than before. This turned around into 13:00 ET when the momentum picked up on the upside, although volume remained light. The indices then hung in there until the Fed announced.

The reaction to the Fed held the typical post-announcement form, making three tiny waves of action and reaction and three larger ones on the 5 minute to follow. These larger moves began with an upside thrust within a few minutes of the announcement. The counter-move to that was rather demure, lasting only about 15 minutes into 14:30 ET. The third reaction continued the initial one, leading to new highs on the day and eventually new highs on the year for the Dow. The S&P 500, however, held the prior highs perfectly and the indices pulled back a little into the close.







I think that a little continuation of the Fed day rally is warranted before the week is over. Google Inc. (GOOG) is going to weight a bit on the market after falling following the release of their quarterly sales data, which came in just ahead of expectations. Dell (DELL) will offset the impact on tech somewhat with the announcement of the return of Michael Dell as the CEO following the resignation of Kevin Rollins. The stock rose more than 4% in the after-hours trading on the eve of the announcement.

Economic Reports and Events This Week
Monday: ...
Tuesday: ...
Wednesday: Employment Cost Index, GDP-Adv., and Chain Deflator-Adv. for Q4 (8:30 am), Chicago PMI for Jan. (9:45 am), Construction Spending for Dec. (10:00 am), Crude Inventories 1/26 (10:30 am), FOMC Policy Statement (2:15 pm)
Thursday: Personal Income, Personal Spending and Initial Claims (8:30 am), ISM Index for Jan. (10:00 am), Auto and Truck Sales for Jan. (5:00 pm)
Friday: Nonfarm Payrolls, Unemployment Rate, Hourly Earnings, and Average Workweek for Jan. (8:30 am), Factory Orders for Dec. (10:00 am), Michigan Sentiment-Rev. for Jan. (10:00 am)

Key Earnings Announcements This Week
Monday: ...
Tuesday: ...
Wednesday: AL, AGN, ADS, MO, AVB, BOT, CRUS, CEG, CCK, CUTR, DLLR, D, DOV, EK, LLY, FDRY, GILD, GOOG, HLIT, HES, HOLX, HYDL, JDSU, MCHP, PHM, SEPR, SLAB, SBUX, SRI, STE, SUN, TSRA, BA, VRSN, WEBX, XEL
Thursday: AMZN, BUD, APA, CA, DIGE, XOM, HAIN, HP, ITWO, INSP, MRO, MNST, MUR, MYL, NURO, RTN, HOT, BCO, UTEK, VLO, VRTX
Friday: ACI, CAM, CVX, HMY, NYX, R, THQI, WEN
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. This list is not a complete list of earnings, so always double check!

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.