Market Remains Quiet as Meat of Earnings Season Awaits

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The market ended its two-day losing streak Wednesday, but remained very quiet. The S&P finished 0.26% higher. After some early strength, the indices drifted in a tight range for the remainder of the session. Ultimately, these last three days were simply rest for the market after a volatile period surrounding the fiscal cliff situation.

Alcoa (AA) kicked off earnings season last night with a basically in-line report, but finished with a 0.22% loss today despite opening higher. The real meat of earnings season gets going next week, and bank earnings will be interesting to watch early in the week after recent strength in the sector. Keep in mind that Wells Fargo (WFC) is the first bank to report ahead of the open Friday.

The tradable action was very sparse today, but a clear standout was Facebook (FB). FB rested yesterday after a strong five-day run, but didn't rest for long as it ignited to five-month highs today. The stock finished the day up 5.26%. Scott Redler highlighted the cup and handle pattern in Facebook in his 2013 predictions, and so far the pattern has played out well.

Traders do not like the action to be too quiet for sustained periods of time, but overall this digestion is healthy after the fast start to 2013. The S&P 500 ETF (SPY) has built a nice floor above $144.73, the low of the day from January 2nd. Earnings next week may be key to whether we get another leg higher or fill that new year's gap.

*DISCLOSURES: Marc Sperling is long GS, BAC, FB, CMG, LNKD, CRM, AGU, GNRC, FFIV, FSLR, ANTH, RGR, ZNGA, POT, TZOO, RIMM, YGE, SHOS, S calls, ZNGA calls, DELL calls, GRPN calls, RIMM calls, AOL calls, DNDN calls, MLNX calls, GNRC calls, UA calls, MCP calls, FB calls, PANW calls, CMG calls, LNKD calls, AAPL calls.

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