Good morning! The market continued its strong intraday swings from highs to lows and back again within the trend channel of the past several weeks on Friday. Volume was strong as the day began with a large downside gap. The market opened into strong price support from the prior day's lows in the indices and 15 minute 200 sma support in the NASDAQ Composite. As with the majority of gaps in the market of this size, the indices began to close the void within the first hour of the day. After pulling up a bit at the open, the market fell along a base into the 10:15 ET reversal period, breaking higher out of that Phoenix buy pattern. The gap closed with this continuation move over the next 15 minutes.

As the gap closed, the pace of the upside action intraday began to increase. Nevertheless, the correction from that resistance level still got off to a strong start. This forced the market into a range in order to allow the pace to turn back over for a continuation of the buying into noon. This time the market made it back into Wednesday's highs before slowing. With no exhaustion move yet, I started watching for a 2T reversal pattern on the 5 minute charts. This would occur if the market managed to make only slightly higher highs. The move out of the bull flag at 13:30 ET, however, was too strong for that pattern to occur. Nevertheless, that upside move was the last one of the day.

The NASDAQ came the closest to a 2T, but the S&P500 and Dow both broke highs by a greater degree. The S&P500 stalled when it hit the highs on the week while all three started to turn over with the 14:00 ET reversal period. The selling was swift, much stronger in the NASDAQ than the prior upside move. When support hit, the market fell into a base with declining volume into the 15:00 ET reversal period. The volume decline indicated that, even though there was upside off the support (the 5 minute 20 sma in the case of the S&P 500 and Dow), there weren't a lot of interested players in the attempt. As with the last couple of weeks, the market was soon back to lows by the end of the day, giving back all the prior gains in less than half a day.

Although the market has been moving quickly from highs to lows, the downside action has been more pronounced, with lighter volume on the upside moves. This indicates that we could more easily see stronger and continued downside this week as opposed to the other way around. What we need to see to support that will be a slowdown on upcoming rally attempts, where the pace is weaker than on Friday's late day selling.

Economic Reports and Events
Mar 03: Mich. Sentiment-Rev. for Feb (9:50 am), ISM Services for Feb (10:00 am)
Mar 06: Factory orders for Jan (10:00 am)
Mar 07: Productivity-Rev for Q4 (8:30 am), Consumer Credit for Jan (15:00 pm)
Mar 08: Crude Inventories 03/03 (10:30 am)
Mar 09: Initial Claims 03/04 (8:30 am), Trade Balance for Jan (8:30 am)
Mar 10: Average Workweek for Feb (8:30 am), Hourly Earning for Feb (8:30 am), Nonfarm Payrolls for Feb (8:30 am), Unemployment Rate for Feb (8:30 am), Wholesale Inventories for Jan (10:00 am), Treasury Budget for Feb (14:00 pm)
Mar 13: -
Mar 14: Current Account for Q4 (8:30 am), Retail Sales for Feb (8:30 am), Retail Sales ex-auto for Feb (8:30 am), Business Inventories for Jan (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
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)
Mar 08: AVII (B), CWTR (A), DYN (B), GMST (A), L (?), MIK (A), SFCC (A), PKS (B), TIVO (A), WIND (A)
Mar 09: ARO (A), BBI (B), CTIC (B), CLE (06:00 am ET), FLE (B), GOL (A), GTI (B), HANS (?), TMR (?), NSM (?), ZQK (?), TNE (B), PLCE (?), URBN (06:00 am ET)
Mar 10: ALTI (?), ANN (B)
Mar 13: DNDN (?), IDWK (?), PVX (?), SONS (A)
Mar 14: GS (B), MIR (?), PDE (A), SUG (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.