Good Morning, Traders. Inside day yesterday. If you look at the circled area on the snapshot above, you'll clearly see that all of yesterday's action was inside of the prior day's action. As we talked about recently in this column, volatility contraction leads to volatility expansion. An inside day is often an example of a contraction of volatility. Eventually stocks need to move out of the prior days range (obviously) to really get anywhere. Think of this as a top winding up. Eventually it spins out of the range.

Market looks fine here in the Big Picture, just a consolidation off of the recent February run up. From mid month last month we have not really moved at all. There's been some great intraday back and forth volatility but we have not really advanced much. Strength yesterday was extremely split with metals and oil services leading a bit and retailers and insurers lagging. Breadth was relatively equal as well with advancing volume and declining volume running at parity. Advancers fell behind decliners at by the close by about 400 to 1 on both the NYSE and Nasdaq. Overall volume was mixed so we actually had a day of distribution on the NYSE as overall volume rose a bit with the Dow and S&P both logging losses for the session. Overall volume contracted a bit on the tech-heavy Nasdaq so it didn't earn those dubious honors even with the Nasdaq falling 3.53 for the session. Overall bias remains upward but sideways in the near-term.

Peter Reznicek is Chief Equity Strategist for ShadowTrader.net a subsidiary of thinkorswim, and a Principal of the Prana Fund, a hedge fund.  Mr. Reznicek can be reached at preznicek@shadowtrader.net.