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Market Digests Near Highs as Earnings Season Set to Heat Up

John Darsie

The S&P went back into digestion mode Friday after yesterday's push higher out of the mini upper level 2013 base. For intrad-day traders the action has been a bit lethargic, but for swing traders and investors this is very healthy action. You don't like to see a market go too far, foo fast, but rather you like to see stocks and indices put in upper level bases after extensions.

Wells Fargo (WFC) kicked off earnings for the banks this morning with a decent report. The company beat on EPS by 2 cents, but its net interest margins fell short of expectations. After a strong run for the banks over the last few months, it could take better than "decent" reports to trigger more upside. Most of the big names in the sector report next week.

Two actionable set-ups traders will be watching next week are Amazon (AMZN) and Salesforce (CRM). AMZN is basing nicely above the previous breakout level, which is what traders like to see for a potential calculated entry. Look for possible momentum if the stock trades above the $269.72 pivot next week.

CRM has been impressive since those November 16th reversal lows. The stock has held nicely at upper levels and looks like it could get momentum next week when the market could be a bit more lively. You could use the $173.96 pivot as a a trigger buy price if you are not already long.

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*DISCLOSURES: No relevant positions