Good morning! The market had a very strong morning on Wednesday, continuing its recent correction off 20 week simple moving average support. Volume was light, however, and the intraday action was rough. The day began near the prior day's close, showing some initial trouble before it started to climb off 10:00 a.m. ET lows. This was enough for the NASDAQ to take back half the losses from the prior day, but it wasn't until after 11:00 ET that things really began to shake up.

The market broke out strongly shortly after 11:00 ET, following a sloppy cup with handle on the 5 minute charts. Volume dropped significantly heading into the setup, but picked up well as the highs of the day gave way. The initial breakout took the indices well into Tuesday's highs where the pace then slowed as it reacted to that resistance zone.

The sharp upside into noon took its time correcting. The market continued to inch higher until the 13:00 p.m. ET reversal period. At that point it began to give back some of its gains, breaking the 5 minute 20 sma shortly before 14:00 ET. After coming into price support from earlier congestion in the day, the market fell flat and continued to chop its way into the close.

I found Wednesday to be a rather difficult day for intraday setups. The indices in particularly had a great deal of overlap from one bar to the next on the 5 minute charts, making setups on that time frame hard to come by. It was a market that would have been easy to have gotten whipped out of. I played things light on my first day back from New York and ended up avoiding the indices completely. I had missed the mid-day cup with handle, but it's quite possible that the slightly higher high on the handle would have kept me out anyway. 

I don't see a great deal in the market to lead things going into Thursday. There is a lot of speculation out there as to the move on Wednesday, ranging from the belief that the Fed will soon be ending its rate hikes (after the next session) to cheaper oil and very modest consumer price increases. I don't think any of these really played a huge role. The indices had rounded off at lows on Tuesday, trapping new bears, and simply didn't have enough reason to let go of the daily support. The daily chart on the NASDAQ suggests that it can continue to hold on for another week or two as it bases along the 100 day sma.

My outlook into the weekend is bullish but choppy. I'd like to see another hour or two of correction off Wednesday highs to form a better base before it breaks higher though. The pace on the 15 minute charts is too bearish at the moment after that 13:30 ET drop and the rounded highs.

Economic Reports and Events
Feb. 23: Initial Claims 02/18 (8:30 am), Help-Wanted Index for Jan (10:00 am)
Feb. 24: Durable Orders for Jan (8:30 am)
Feb. 27: New Home Sales (10:00 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 23: ALSK (A), BEAS (?), BDN (?), BWNG (B), CNQ (B), CBS (?), CHK (A), CMS (B), CYH (B), DNR (?), DROOY (01:00 am ET), ECLP (B), ESV (?), FHRX (A), FTO (?), GPS 8A), GW (?), TV (A), HRB (A), HMT (B), KSS (?), LTD (B), LOUD (?), MVL (B), MRVL (A), MCCC (B), MGM (B), NABI (A), NTES (8:00 pm ET), NIHD (?), NBL (?), JWN (?), NXG (?), OCR (B), OKE (?), PAAS (?), PDCO (B), ROIAK (B), SWY (11:00 am ET), SUPG (A), TCP (A), TOL (?), TMTA  (A), WGR (B)
Feb 24: AMT (B), CZN (B), EPL (B), ERF (?), HUN (B), KSE (10:30 am ET), NOV (B), PAL (?), SLXP (B), SNY (01:30 am ET), SPN (?), WON (B)
Feb 27: AFR (B), CVC (B), CNO (A), KND (A), LOW (?), NEM (?), NUVO (?), PDLI (A), SNDA (A), UPCS (A), UHS (A), VCLK (4:05 pm ET)
Feb 28: AGIX (B), ADSK (A), BJ (?), CDIS (A), CNP (B), CRDN (B), CHTR (B), CCI (A), BOOM (?), EV (?), HLTH (A), HNZ (?), HSP (B), IIP (?), IVGN (?), PSUN (A), PRX (B), PSS (B), PGH (?), PLUG (B), SWN (A), SPLS (B), TEVA (B), THE (B), VPHM (B), VNO (B), WMB (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.