The stock market continued it's post election ascent last week, as falling energy prices, solid retail sales results, strong technical considerations and favorable seasonal factors sent the S&P 500 to its highest level since August, 2001. The Index rose 18 points, or 1.5% for the week, to close up 6.5% for the year. The Russell 2000 added 18 points, or 2.9%, and is up 11.7% for the year. The NASDAQ gained 46 points, or 2.3%, which has helped account for the majority of the 4.3% gain this year. The Dow even moved into the black for the year, tacking on 151 points, to record a gain of 0.8% this year.

With hedge-fund managers now chasing returns as the year-end and bonus time nears, the market appears to have momentum in its favor. As most investors know, the November-April time period is a seasonally favorable one for stocks. This month, the S&P 500 is already up 4.8% and by far the best monthly gain of the year so far. While the S&P 500 has established a new high for the year, the NASDAQ (68 points) and Dow (214 points) remain below their January yearly highs. The NASDAQ has likely been held back by the relatively weak performance of the Semiconductor sector, and is the likely sector to rally if technology stocks are going to post gains. The SOX Index rose 1.4% last week, with all of the gains coming in the last two trading days.

The current momentum in the market is very strong, as evidenced by 674 NYSE stocks making new highs versus just 39 reaching new lows (416-75 on the NASDAQ) it should come as no surprise that momentum investing has returned to the market as traders look to make quick scores in thinly traded stocks. While many by now are familiar with Taser International (TASR) and TravelZoo (TZOO) as trading vehicles, many NASDAQ Small Cap stocks made big moves last week. These thinly traded companies have come to the attention of traders. They include GoAmerica (GOAM), up 350% last week on huge volume, Dynamic Materials (BOOM), up 95% on 65 times average volume and Interchange (INCX), up 51% on five times average volume. With relatively small floats, these stocks have the potential to be extremely volatile, so caution is key.

What can investors look for this week? Though most of the Q3 earnings have already been released, there are still some companies reporting results that have the potential to move the market. They include home retailer Lowe's (LOW) on Monday morning and Home Depot (HD) on Tuesday before the market opens. Wal-Mart (WMT), JC Penney (JCP), Saks (SKS) and Staples (SPLS) join the retail parade that day. After the close, Hewlett-Packard (HPQ) reports results. Wednesday evening, chip equipment company Applied Materials (AMAT) posts profits. Thursday afternoon, Walt Disney (DIS) reports results.

On the conference scene, Bank of America holds a three-day Energy and Power Conference beginning Monday in Las Vegas. Merrill Lynch also holds a Financial Services Conference on Monday, at which CitiGroup (C) and JP Morgan Chase (JPM) are scheduled to present. SG Cowan holds a two-day Global Healthcare Conference beginning Tuesday in Geneva, Switzerland. UBS holds its Ninth Annual Global Communications Conference for three days beginning Tuesday in New York. Cisco Systems (CSCO) and Microsoft (MSFT) are scheduled to present. Wells Fargo holds its Annual Technology Conference for two days beginning Wednesday in New York. Lehman Brothers holds a three-day Small Cap Conference starting Wednesday in Scottsdale, Arizona. Rambus (RMBS) holds an Analyst Day on Wednesday. Cisco Systems holds its Annual Shareholders Meeting on Thursday. The SEMI Book-to-Bill Report will be released on Thursday.

Economic events this week include: Tuesday, the October Producer Price Index will be released. Wednesday, October's CPI, Housing Starts and Industrial Production and Capacity Utilization will be released. Housing Starts for the month will also be announced. Thursday, OPEC will issue its monthly oil-market report. October Leading Indicators and the November Philadelphia Fed Survey (in the afternoon) will be released. Fed Presidents Moskow and Santomero speak on the economy on Tuesday. Fed President Stern speaks on the economy on Thursday. Friday, Fed Chairman Greenspan participates in a panel discussion in Europe scheduled for 8:30 am EST.

The headline event of the week is likely to be the Federal Reserve's decision on interest rates, to be announced Wednesday afternoon. Expectations are that the body will increase interest rates by 25 basis points, and may change its policy statement modestly as a result of the strong Employment Report on Friday. Tuesday, September Wholesale Inventories will be announced. Wednesday, the September trade deficit will be reported. Also, the International Energy Agency releases its monthly oil market report. Friday, retails sales will be announced for October, along with the preliminary November Michigan Sentiment Index.

Stay Tuned!