Good morning! Friday's action came as no surprise as the market had a tough time mounting any strong directional bias intraday. The session consisted primarily of the back and forth action on the 5 and 15 minute charts that we were looking for heading into the day. The morning began with a bit of upside to correct to 15 minute 200 sma support in the Dow and NASDAQ Composite that had hit right away, but this came to an end with the 10:15 ET reversal period when the indices all formed 5 minute shooting star candlestick patterns at 20 sma resistance on 5 and 15 minute charts and began to sell off.

The return of the selling meant the third wave of downside on the 5 and 15 minute charts. Once the 10:45 ET reversal period hit the NASDAQ formed a 2B by barely breaking the prior low while the S&P 500 found support at Thursday lows and the 15 minute 200 sma. Heading into the remainder of the morning I was looking for a much more significant correction from the support after the three waves of selling that had taken place. This began with a steady upside move into the 5 minute 20 sma where the S&P 500 and NASDAQ both formed nice Phoenix patterns along the resistance before breaking the downtrend channel into noon.

The market rallied into 15 minute 20 sma resistance in the Dow and the day's highs in the NASDAQ and S&P 500 before stalling just ahead of the 13:00 ET reversal period. That reversal zone brought with it a return of the bears, but the action remained choppy and the market only managed to make it back into the zone of the congestion from the earlier base between 11:15-12:00 ET. It held that support level very well as it hit with the 14:00 ET reversal period and the market again rallied to the day's highs. This was able to break in the S&P 500 and Dow Jones, but the larger 15 minute range remained in place and the 15:00 ET reversal period led to a final pivot off highs that held for the remainder of the day.

Despite expectations of this type of choppy trading range on Friday, I sat out for most of the day after missing a couple of the setups I had been following in the morning due to light volume and earlier than anticipated triggers. The action was so choppy throughout the session, that even with the strong bias of a pivot type of trading day, it was hard to find strong reversal patterns. The reversal zones did hold well, but the support and resistance levels had more flexibility.

I don't have a strong opinion on what to expect going into Monday morning. The range isn't really favoring one way or the other for a breakout yet as a whole. On the 15-60 minute charts the upside is more gradual, which is suggestive of a longer correction off highs, but it wouldn't take a lot to turn that around, so I don't want to get too focused on either side. The 100 day simple moving average in the NASDAQ remains strong support. Another test of it will be the third one and the one most likely to break. I'd want to see a strong drop into that level in the morning on Monday and then a base along it intraday in order to get a solid breakdown from that support though.

Economic Reports and Events
Feb. 27: New Home Sales (10:00 am)
Feb 28: Chain Deflator-Prel. for Q4 (8:30), GDP-Prel. for Q4 (8:30 am), Chicago PMI for Feb (10:00 am), Consumer Confidence for Feb (10:00 am), Existing Home Sales for Jan (10:00 am)
Mar 01: Personal Income for Jan (8:30 am), Personal Spending for Jan (8:30 am), Construction Spending for Jan (10:00 am), ISM Index for Feb (10:00 am), Crude Inventories 02/24, Auto Sales for Feb (12:00 am), Truck Sales for Feb (12:00 am)
Mar 02: Initial Claims 02/25 (8:30 am)
Mar 03: Mich. Sentiment-Rev. for Feb (9:50 am), ISM Services for Feb (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 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)
Mar 01: ADCT (A), AEOS (B), AZO (B), CHS (A), CTB (B), CVTX (A), FLR (A), FL (?), THX (B), HOV (A), JOYG (B), LIZ (B), MDR (A), MHS (B), MW (4:00 pm ET), NVAX (?), OVTI (?), OS (?), PLL (A), PETM (A), REV (?), RDC (?), SKS (08:00 am ET), SPW (B), TLM (?), TS (?), WLT (?), WNR (A)
Mar 02: TFSM (B), CKP (B), CIEN (?), COST (B), CMOS (A), DT (02:00 am ET), FNSR (A), HOMS (A), INSM (A), KOPN (?), NTMD (B), NOVL (A), OPSW (A), PBY (A), SFCC (A), SCON (B), THC (B), PGR (?), UVN (A)
Mar 03: BVN (?)
Mar 06: ABP (B), CMGI (A), RIO (A), GG (B), KFX (A), LEXR (A), MYOG (A), SMTC (A)
Mar 07: ABS (?), SIL (?), MATK (A), NR /?), NRG (?), OSIP (A), PSTI (B), SRZ (?), COO (A), KR (?), URI (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.