Market Next Week: A Possible Santa Rally?

We clearly break the crazy dive we had experienced in October and November. We have been rallied 17% from November 20th low of S&P=750. We are still heading up and have 50 DMA and 900 as a strong resistance. Now we are higher than the 10 and 20 DMA, while the volume is relatively light. The market has also been taking the bad news a lot more calmer, without a lot of +3% up/down days now. I think now we are at #4 wave of the Elliott Wave.

From CNBC: Week Ahead: Santa's Rally Could be Driven Chevrolet:

Stocks could chug higher if investors are comfortable with the status of the auto industry bail out and the Fed does not makes any surprise moves when it meets early in the week.

The Fed is expected to trim its target Fed funds rate by a half point, trimming it to a half percent, at the end of a two-day meeting Tuesday afternoon. There is a batch of fresh data on production, housing and inflation and fourth quarter earnings from major brokers—Goldman Sachs and Morgan Stanley.

"Economic news was as bad as it gets last week, and the market trades higher. It's not that bad news is good news, it's just that it's not getting the bad reaction it was getting," said Hogan. Hogan said he does not expect the broker earnings to surprise the market in the coming week. Bad news is already priced in to their shares.

Economy Reports:

Monday - FED Meeting starts, Empire State Manufacture Survey, Industrial Production, Housing Market Index
Tuesday - Consumer Price Index, Housing Starts, FOMC Announcement,
Wednesday - OPEC Meeting, Bank Reserve Settlement, EIA Petroleum Status Report
Thursday - Jobless claims, Philadelphia Fed Survey, Leading Indicators

Earnings:
Tuesday - Goldman Sachs earnings, Best buy, Adobe
Wednesday - MS Earnings, Nike
Thursday - Rite Aid, FedEx, Pier One, Oracle, Palm, Research in Motion, 3Com