Although it has been a shortened trading week, the markets have been active and have definitely not had any sort of shortage of market moving reports.

The ISM Manufacturing Index surprised the market Wednesday coming out at 51.4% versus consensus numbers closer to 50% expected. Both mortgage applications and construction spending came out stronger than expected leaving many people wondering if the decline in the housing market is stabilizing or bottoming out. The ADP employment report came out weaker than expected showing the private sector losing 40,000 jobs indicating that the Monthly employment number may not be as strong as previously expected either. This rallied the interest rate markets and should have pressured the Dollar. According to Gartman, "a market that will not fall on bearish news is not bearish". For this reason, I attached the Dollar chart below. However, it is important to keep in mind that the ADP number has not always come out exactly as the Monthly employment number has. The Monthly Unemployment number increased by 167,000 jobs stronger than expected further supporting the dollar.

The FOMC meeting minutes also came out suggesting that the Fed members are concerned of both a lack in economic growth as well as potential inflationary pressures. Since most of the reports released over the past few weeks have been friendly to the economy, the market is expecting another "no change" verdict at the next FOMC meeting. However, with a change in some of the voting members this year, an increase in rates is not out of the question as a result of inflationary pressures.

The Dollar index and Eurocurrency charts appear more interesting. The Dollar appears to have reversed the down trending channel from October and closed above 8387 closing a significant gap from November. The Eurocurrency chart has also broken the uptrending channel from October. The break in the Eurocurrency below 13100 indicates that the near term trend has definitely changed in the currencies.

Financial Reports for the week of January 8th - January 12th:

Wednesday: US Trade Balance - 7:30 am CST

Wholesale Trade - 9:00 am CST

API/EIA Energy Stocks - 9:30 am CST

Thursday: Weekly Jobless Claims - 7:30 am CST

EIA Gas Storage - 9:30 am CST

Friday: Business Inventories - 7:30 am CST

Retail Sales - 7:30 am CST