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The markets opened higher this morning with data coming from the Government suggesting the economy's on the improve. The S&P continues to lead making another new multi-year high with the index's biggest names taking charge. Technology and financials are experiencing the benefit of today's sharp move higher, as data revealed the number of jobless Americans filing new claims for unemployment benefits fell to a five-year low last week, while initiation of new homes being built increased to their fastest pace in four years last month.

Weekly unemployment benefit applications fell 37,000 to a seasonally adjusted 335,000, the Labor Department said Thursday. That's the lowest level since January 2008, just after the recession began. The four-week average, a less volatile measure, fell to 359,250. However, the applications data can be uneven in January. Job cuts typically spike in the second week of the month as retailers, restaurants and other companies lay off temporary workers hired for the winter holidays.

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Since fourth quarter earnings seem to be the center of attention this week and for the next three weeks or so, we thought we'd point out an interesting bit of information we uncovered as it relates to retailers this past holiday season. Analysts say holiday sales were the weakest they've been since 2008, and far from what retailers had been expecting. A report that tracks popular holiday gifts shows sales in the two months before Christmas increased .7 percent from last year. But many analysts expected that number to grow three to four percent. The low numbers are being blamed on bad weather, like Super Storm Sandy, rising uncertainty about the fiscal cliff and the national grief felt by the school shooting in Connecticut. How much of that is simply an excuse or whether they were real factors remains to be seen.

As for the rest of the markets’ trading behavior today, we’ve got a pretty mixed bag of results across the board with the NASDAQ, S&P and DOW all pretty much flat on the day as Americans are pouring billions of dollars into stocks. Just over $22 billion flowed into long-term equity mutual funds and exchange-traded funds in the week ended Jan. 9, according to Bank of America Merrill Lynch. That was the second-highest amount on record after the $22.8 billion that went into all equity funds in September 2007.

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Good day to you. The indexes continue their back and forth behavior trying to determine if they're going to move higher going into fourth quarter earnings now or not. If you aren't currently Member of our newly launched SmallCap Network Elite Opportunity (SCN EO), you may want to do so in fairly short order. John Monroe, Editor in Chief of SCN EO, published some compelling information this morning with respect to fourth quarter earnings and how they are lining up with the current levels of the market. It was their first edition today, and I have to admit it was impressive. In addition to their analysis of the upcoming earning's season, the SCN EO Team also put out a list of eleven open ideas, of which only a few have been previously mentioned in our free newsletter here. Two of those ideas were suggested to be among the small group of large caps that will inevitably lead this market higher.

The SCN EO Team's track record for last year was exceptional, so it's probably worth a few minutes to learn about this new subscription opportunity. If you're serious about making money in the markets, it's a must have daily email newsletter service that's sure to not only keep you on top of the markets, but it's targeted to provide you with ideas that can help you make better returns on your investing dollars without having to throw darts. The bottom line is if today's newsletter, or any of our free newsletters going forward, aren't giving you everything you need with respect to timely market commentary, stock picks and more, it's probably well worth the money to become a SCN EO Member sooner rather than later.

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While the indexes continue to jostle and decide if last week’s strong bump was too much too soon, we’re going to focus on something today that should be far more important to you than whatever the indexes are going to do over the next few hours. Most of you who have been getting our newsletter for any length of time know we live and breathe the markets every day, and have worked diligently to bring you not only ideas that should have made you a lot of money, but teach you how the markets work and provide you with the type of timely commentary many financial market professionals pay thousands of dollars a year for. However, it’s not so much our interest or goal to make Wall Street professionals more money, as much as it is making the Main Street trader and investor more money.

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Good Monday to you. Markets are off to pretty much the same start we saw most of last week after the big Wednesday boom to start the year. Not a whole lot of change yet while the indexes wrestle with the possibility of either pulling back as we head into fourth quarter announcements, or continue their moves higher after grinding sideways over the last couple of trading days. Truth is, either scenario is very possible in the very near-term. The NASDAQ opened the weakest of the bunch this morning testing last Wednesday's low on the day. I've included a an hourly bar chart of the NASDAQ Composite showing you what I'm referring to. No harm no foul really since last week's move was so impressive. However, should the Comp. crack the morning's low back to the downside, I suspect the indexes will continue at least a bit lower in an effort to retrace 3/8 of last's week's impressive move. A complete 3/8 retracement of last week's move would put the NASDAQ Composite around 3055 as you can see here.

Although last week's move was impressive indeed, this week will be the telltale sign if the bulls have enough conviction and buying power to take this market higher. Why? Plenty of money came into the markets the first day back, however, the volume and interest waned as the week went on. That's pretty typical to kick off a new year and a new quarter. What we need now in order to be convinced the indexes are moving higher is a resurgence of last week's early volume. Short-term trading cycles typically tend to run in three day waves, so this week is critical if we're going to move higher without any significant backing and filling. As a matter of fact, that 3/8 retracement level I mentioned above will likely become a key battle point between buyers and sellers. The longer we can grind sideways without sellers entering the markets, the more it supports the bullish argument.

You can also see in the chart of the Comp. the hourly chart is doing its best to hold the 25X5 (purple line), which often serves as a fairly strong backstop after a big run-up like we had last week. Another important factor to consider when trying to determine if these markets want to work their way higher in the short-term is the VIX. The VIX is the key measure of volatility in the markets, and more importantly, one of the best measures in determining whether or not there's enough fear out there to rally savvy money to the upside. I've included a weekly chart of the VIX here showing you last week's strong bump brought the VIX all the way down around recent historical lows. Unless the VIX can take out the lows in this chart, which is actually pretty doubtful, it appears the markets would be in for at least a fairly decent pullback that would put the VIX back around normal levels. What you can't see in this chart of the VIX is the last time VIX levels were lower than where they are now dates back to 2005 and 2006 when the markets continued to grind higher. In my opinion, the best time to be buying stocks is when VIX levels are screaming higher. History has taught many of us to be careful when VIX levels are at all-time lows. It suggests a bit of complacency in the markets, and that's generally never a good thing. A good hard scare is often the best time to be stepping in and snapping up the right ideas.