Good day! I hope you had a great trading week last week! I was able to follow along with the market on part of the day Friday and the continued downside we were looking for heading into last Monday has held pretty well. The indices fell into a nice 60 minute range heading into the end of the day Tuesday, creating the 60 minute continuation pattern I had mentioned to watch for. This then broke lower, triggering further selling into the end of the week.

On Friday we saw the market come into the next level of support as it ran into prior daily lows from January in the NASDAQ and last month in the SP500. The NASDAQ was again the weakest index, falling quickly out of the open while the SP500 and Dow Jones Ind. Ave. continued to range on the 5 minute charts. The S&P gave way more quickly than the Dow though, breaking lower out of 10:00 ET to come into Thursday afternoon lows. At that point the market created a small 5 minute Bear Flag to lead to more selling into the 10:45 ET reversal period.

As the indices came into support from Wednesday afternoon lows, the NASDAQ formed a nice 2B setup by just barely making new lows as it held the reversal period going into the mid-day doldrums. The pace on the bounce was pretty strong, albeit a bit less than the prior drop, making a trading range most likely. This fell into the form of a symmetrical triangle heading into the early afternoon. It triggered a short as it broke the third test of its lower trend channel and the market fell very quickly to new intraday lows. From there it then went on to mimic the morning's two waves of selling by forming a small Bear Flag and breaking lower out of the 13:30 ET reversal period before finding support on the daily charts.

Heading into the weekend, the larger daily support made it difficult for the market to break lower in the afternoon. Instead we saw a few smaller 5 minute reversal patterns with the market holding up pretty well into the close, pulling back up into late morning price levels to end the day.

As the new week begins, I am watching MIK, PRU, IPS and CVS for potential swingtrade longs and XEC and UNT as swing shorts. Overall I still remain a great deal more hesitant to invest much on longs. In my scanning this weekend I didn't find a great deal on either side of the market, but overall there were a lot more stocks at larger weekly and monthly resistance than there were at support. My bias in the market as a whole is therefore still more bearish as the NASDAQ's Avalanche we've been following has been performing well. The next likely pattern on the daily charts is a Bear Flag on a pullback to the 20 day sma zone.

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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.