The upcoming week is likely to be quiet -- at least on the business-news front -- due to the Christmas holiday, but sentiment is building that the market might rally into the end of the year.

On Friday, the major indexes were mixed. The Dow Jones Industrial Average fell 25.88 to 8579.11, the Standard & Poor’s 500 index rose 2.60 to 887.90 and the Nasdaq Composite rose 11.95 to 1564.32.

Some market professionals were bullish in light of recent rallies, and as the market heads toward year’s end, when stocks often see a rally.

In a research note, Robert Pavlik of Oaktree Asset Management says he has seen “a reduction in the overall selling pressure."

In addition, he noted that “while we are not advocating an aggressive ‘all-in’ investment approach, we are seeing select buying opportunities and we are using bouts of market weakness to position our clients into high-quality early cyclical sectors and industry leading companies which we believe will emerge from the current recession in a stronger more competitive position.”

Pavlik said he’s also optimistic because of the amount of cash on the sidelines and the “large number of reluctant and underperforming portfolio managers” that could turn more optimistic if they start to see stocks rally.

James Paulsen of Wells Capital Management agreed, and said that a comparison of this current downturn with four previous market panics [1903, 1907, 1920 and 1973-74] shows that things might not be so bad.

Paulsen said that each time, the markets recovered to their pre-crisis peak levels “within about 12 to 18 months of reaching their respective bear market lows.” He said “it implies the S&P 500 should more than double from its 752.44 low established in November by May 2010.”

Paulsen did mention that he left out 1929 and 1937, when it took the markets 25 years and eight years, respectively, to recover to peak levels.

Not everyone is so optimistic, though.

“The recession and tight credit is not going away anytime soon. Ugly is in for the consumer, being ordinary and spending less,” said Maryann Hurley of D. A. Davidson in emailed comments.

Monday brings earnings from Circuit City (CC), which has filed for bankruptcy protection, as well as Walgreen (WAG). Technology company Red Hat (RHT) also reports.

On Tuesday, Micron (MU) and American Greetings (AM) release their earnings results.

On Wednesday, Christmas Eve, most financial markets close at 1 p.m. Eastern time. Thursday is Christmas Day, and most markets are closed entirely.

Friday looks to be especially quiet on the earnings and news front, as many market participants are likely to take an extended Christmas weekend.

With the lighter volume for the holiday week, volatility could be higher than usual.

Other issues to watch in the week ahead include developments on the auto industry after General Motors (GM) and Chrysler were promised $14.3 billion in aid from the U.S. Treasury, and Ford Motor (F) looked to be in line for money if needed.

Also, Treasury Secretary Hank Paulson has asked Congress to tap the second $350 billion from the initial $700 billion bailout fund, Treasury bonds continue to trade at historically low yields and oil is under $40 a barrel -- all worth keeping an eye on in the coming trading sessions.