A late week rally gave the market enough of a boost to remove most of January's losses. For the week, the Dow rose 289 points, or 2.8% to close at 10716, now down just 0.3% for the year. The S&P 500 rose 32 points, or 2.7% and is still down almost 1% for the year. The Russell 2000 rallied 4%, and is now down 2.2% this year. The NASDAQ, added 50 points, or 2.5%, is down 4.1% for the year.

The reason for the turnaround last week may be found in a sector that we have mentioned many times as the key sector to any sustainable rally in the overall market. The Semiconductor Index (SOX), which has been lagging since early December, broke through its 50-day moving average last week. This could possibly open the door for the rest of the tech sector.

With the market's technical condition improving and the earnings being reported for Q4 strong, the market appears to be getting it's footing. Caution is still the operative word however. Q1 earnings are expected to increase by only 7%, while the average earnings grew at 18% in Q4. This suggests that the earnings momentum for some companies is slowing down. Also it should be noted that investor sentiment has remained very complacent, as measured by the Volatility Index (VIX), and is at multi-year lows. Another negative for the market is the volume that has accompanied any rallies.

So far 68% of the companies that have reported earnings have beaten analyst's estimates, 14% have reported in line with expectations, and 18% have come in below estimates. This week's earnings parade continues with EDS (EDS) reporting results Monday. Tuesday, Level 3 Communications (LLL) and Cisco Systems (CSCO) will report. CSCO is expected to earn 22 cents per share for the quarter. Wednesday CIGNA (CI) and Metlife (MET) issues results. Thursday after the close, the computer giant Dell Computer (DELL) will posts results. In Q3 Dell made positive comments on their conference call about Q4. Dell has met or exceeded EPS targets for 15 consecutive quarters now.

This week's conference schedule includes brokerage firm Thomas Wiesel holding a technology conference on Monday in San Francisco. Honeywell Corporation (HON) hosts an investor meeting on Tuesday. CSFB will hold a Financial Services Conference on Tuesday. Kaufman Brothers holds an Internet & Security Conference on Tuesday in San Francisco. Merrill Lynch holds a Global Pharmaceutical, Biotechnology & Medical Device in New York on the same day. Google (GOOG) holds an analyst conference on Wednesday and eBay (EBAY) hosts a similar event Thursday.

Economic reports this week include December Consumer Credit on Monday. December Wholesale Inventories on Wednesday. Then on Thursday, the much anticipated December Trade Balance is reported.

In summary, it appears that this week we will see if the technical condition of the market stabilizes with Cisco Systems and Dell leading the way.

Stay tuned!