The market did a fairly decent job of imitating the weather here today: cold and gloomy. I know, you northerners have great sympathy for me freezing when the weather happens to slip under 75 degrees, but still... brrr! By the closing bell on Monday the Dow Jones Industrial Average ($DJI) had shed another 153.54 points, or 1.3%. It closed at 11,740.15 with 26 of its 30 components losing ground, led once again by the financials. Citigroup, Inc. (C) lose 5.8%, while American Express Co. (AXP) fell 3.6%, and J.P. Morgan Chase & Co. lost 2.9%. McDonald's bucked the trend, however, after it reported an 11.7% climb in same store sales for February, adding 2.9% to its share price. The S&P 500 ($SPX) also fell throughout the day, losing 16.77 points, while the Nasdaq Composite ($COMPX) dropped 43.15 points, or 1.9%.

For the third session in a row, the market managed to spend nearly all of the day in a steady downtrend. The session began relatively unchanged, and showed little ambition throughout the better half of the morning. It remained stuck in a range until 11:00 ET, but within that range the upside was on lighter volume and the pace of the trading favored a break lower from the range. It still took until the 11:00 ET correction period, however, before the indices were able to manifest any follow-through.

Once the late morning selling hit, it only took about 15 minutes to break through the morning lows. The S&P 500 and Dow quickly returned to Friday's lows, but the Nasdaq held up a little better, hitting support just shy of Friday's lows. The selling had stalled into 11:30 ET, but continued into the 12:00 ET correction period. This is another common time for the market to correct from a prior intraday trend move. Although the indices had rounded off at these lows, however, the buyers still were unable to take the upper hand. The correction off the lows was very choppy with light volume and light momentum. All of these indicated underlying weakness despite the support.

Highs on the mid-day correction off lows corresponded to the 13:00 ET correction period. These mid-day correction periods did a very fine job of holding moves on the 5-minute time frame and it did not take long for the mid-day uptrend channel to break, setting off a second wave of selling intraday on the 5-minute time frame. Momentum was pretty decent and the indices continued to new lows on the day after a nice little continuation pattern formed heading into 14:00 ET.

The selling was enough to establish an equal move on the 5-minute time frame as compared to the morning's drop. This created price support into 14:30 ET, allowing the indices to correct once again into the final 90 minutes of the day. This final segment of trading was very similar to the first 90 minutes of the day, leaving the indices chopping around into the close. Since the market has now fallen for about three days, holding the 15-minute 20 sma for the most part throughout that descent (although not perfectly), I am anticipating a correction off lows with upside on Tuesday. The market has begun to correct already in afterhours trading in the indices, bouncing off the late-day lows.

Dow Jones Industrial Average ($DJI)


S&P 500 ($SPX)


Nasdaq Composite ($COMPX)


Toni Hansen is President and Co-founder of the Bastiat Group, Inc., and runs the popular Trading From Main Street. She can be reached at Toni@tradingfrommainstreet.com.