What a Week: Fits and Starts Foreshadow

Indeed, while overall earnings reports bested lowball estimates -- by an average of 6.2% according to Thomson First Call -- there were plenty of disappointments and firms' lowering guidance, including eBay (EBAY - Cramer's Take - Stockpickr), which fell 3% Friday in an otherwise upbeat session.

Also, juxtaposed with the aforementioned upbeat economic news were questions about the sustainability of improving trends in employment and durable goods orders, as well as more overt disappointments in existing-home sales and a third-consecutive week of declines in mortgage applications for new homes.

Those apparent cracks in the housing sector's armor were tied to further weakness in long-dated Treasury prices. For the week, the yield of the benchmark 10-year note rose another 19 basis points to 4.19% Friday after climbing above 4.20% earlier in the week, its highest level since early December.

Stocks Pass Test of Technicals

Recouping losses suffered Monday in the wake of a profit warning by Lexmark (LXK - Cramer's Take - Stockpickr) and disappointment over Merck's (MRK - Cramer's Take - Stockpickr) results, major averages rallied Tuesday after initially discounting reports of the deaths of Uday and Qusay Hussein.

Some not-as-bad-as-feared earnings by Texas Instruments (TXN - Cramer's Take - Stockpickr) and cautiously optimistic guidance from Novellus Systems (NVLS - Cramer's Take - Stockpickr) aided the advance, which occurred after the S&P, Comp, Nasdaq 100 and Philadelphia Stock Exchange Semiconductor Index each held at key support levels and/or moving averages.

But there was little follow-through buying on Wednesday despite better-than-expected results from momentum favorites such as Amazon.com (AMZN - Cramer's Take - Stockpickr), Ask Jeeves (ASKJ - Cramer's Take - Stockpickr) and Amgen (AMGN - Cramer's Take - Stockpickr).

Then Thursday, major averages surrendered early gains and ended sharply lower despite an unexpectedly large decline in jobless claims and better-than-expected results from firms such as Dow Chemical (DOW - Cramer's Take - Stockpickr) and AT&T(T - Cramer's Take - Stockpickr).

Thursday's setback left stock proxies in a technically precarious state heading into Friday's session, with the S&P hovering above its 50-day moving average at 979, the Comp about 11 points above support at 1690, the Dow threatening to break its rising trendline. Among other indices, the Nasdaq 100 was sitting just above support at 1252 and the SOX right at its 20-day moving average just below 375.