Good morning! After closing near highs on Friday, the market had a tough time holding onto those gains into the new week. The longer range on the daily charts persisted as the major players keep a close watch on Fed action. On Monday the president of the Cleveland Federal Reserve said that the early Jan. economic reports showed strong growth while Wednesday brings with it the Fed. Reserve chairman's semi-annual address to Congress. It remains to be seen as to whether or not the Fed is determined to halt the trend for rate hikes, but many feel the train is pulling into the station and that the trend will be slowing or coming to a standstill in the near future.

Adding to market woes, the longer-term Treasury yields are still falling below short-term yields. This often leads to less lending on the part of the banks and can be part of the reason that the market has stalled since last November. Technically speaking, we still have room for more correction, although another week or so would suffice. Ideally the volume would decline during that time in order to support a strong breakout from this daily range. Without that volume decline, the risk remains high for the bulls.

Monday's session wasn't one that created a large stir. The market gapped down into the open, hitting support almost right away at the 15 minute 20 sma in the S&P500 and Dow Jones Ind. Ave. With a lot or resistance overhead on the 5 and 15 minute charts, the gap held. Volume declined throughout the morning as the market continue to close in on itself with a narrowing trading range. Finally, as the S&P500 became impossibly wedged between its 15 minute 20 and 200 simple moving average, the range broke. Having favored support throughout the morning hours, selling hit quickly at first, but the pace slowed one it came into morning lows and the 5 minute 200 sma on the Dow.

The series of small bear flags and corrections continued until the 15:00 ET reversal period. At that point the NASDAQ was already having a more difficult time making new lows after coming into support from the prior morning around 14:00 ET. It rounded off, forming a 5 minute 2B pattern by hitting slightly lower lows into 15:00 at a slower than average pace. The bounce was accompanied by both the S&P and Dow as all three indices made it back into the prices that had been trading around 13:00 ET, which also happened to correspond with the S&P500 and Dow's 5 minute 200 sma.

Nothing much has changed in terms of the market overall going into Tuesday on the larger daily and weekly charts. Intraday the market is forming a narrowing range on the 60 minute time frame. With many stocks still looking "topsy" on weekly charts, I am still concerned with the long side of the market. At the same time, the downside pace is currently slowing and the bias intraday at present is more bullish. I do not have much intention of investing too heavily at this point and will keep an open outlook at the week ahead.

Economic Reports and Events
Feb. 14: Retail Sales for Jan (8:30 am), Retail Sales ex-auto for Jan (8:30 am), Business Inventories for Dec (10:00 am)
Feb. 15: NY Empire State Index for Feb. (8:30 am), Net Foreign Purchases for Dec (9:00 am), Capacity Utilization for Jan (9:15 am), Industrial Production for Jan (9:15 am), Crude Inventories 02/10 (10:30 am)
Feb. 16: Building Permits for Jan (8:30 am), Export Prices ex-ag. for Jan (8:30 am), Housing Starts for Jan (8:30 am), Import Prices ex-oil for Jan (8:30 am), Initial Claims 02/11 (8:30 am), Philadelphia Fed for Feb. (12:00 pm)
Feb. 17: Core PPI for Jan (8:30 am), PPI for Jan (8:30 am), Mich. Sentiment-Prel. for Feb. (9:50 am)

Earnings Announcements of Interest
Only stocks with an average daily volume of 500K+ are listed. List may not be complete so be sure to always check your stock's earnings date before holding a position overnight. (A) = Earnings after the close, (B) = Earnings before the open, (?) = Earnings time not specified at the time of this writing
Feb. 14: ANF (A), LEND (B), EYE (B), AEE (B), ACAS (A), BHP (?), CEPH (A), DADE (A), DE (?), DE (?), DQE (B), FTI (A), HL (?), N (B), IM (A), JAH (?), LVS (A), MMC (B), MAS (?), OSI (A), PLAB (A), STR (A), Q (B), RNWK (?), SIAL (A), TRAD (?), RIG (B), UBS (01:00 am ET), UMC (08:00 am ET), WMI (B)
Feb. 15: AMAT (?), AQNT (A), BIIB (A), CECO (?), CMX (B), CEN (B), XEC (B), DVW (?), DVA (B), DENN (A), DGIN (A), DPL (A), DTE (A), ECA (?), ENDP (B), EXPE (?), FST (A), GENZ (B), HC (?), HPQ (?), HRP (B), JNY (B), MT (?), MRVC (A), NTAP (A), ODP (?), PKD (B), PENN (B), PGN (B), SNPS (A), TOT (02:00 am ET)
Feb. 16: ABB (B), AAP (B), AEIS (A), AMMD (A), BHI (B), BRCD (A), COG (A), DELL (A), GLBL (B), GT (B), GES (?), ICGE (B), LCP (?), LEH (B), LEXR (A), LTR (B), LTXX (A9, MRH (A), NTGR (A), NU (?), NPSP (?), NVDA (?), ONXX (B), PLD (B), PSYS (A), RYI (A), SAPE (A), SIMG (A), TGT (?), TKLC (B), FAF (B), UBB (?), WPI (A), XMSR (B)
Feb. 17: APPX (?), CPB (?), PBR (A), PCG (?), RSH (?), SIRI (B)
Note: All economic numbers and earnings reports are in lines with those compiled by Yahoo Finance. Occasionally changes will occur that are made after the posting of this column.

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.