Good Morning, Traders. Markets just limped forward by a hair for the entire week. At every weekend turn, its a very good idea to look at weekly charts as opposed to daily charts. The charts above of the Dow shows a doji star on the weeklies (circled) which basically tells us that the market did nothing for the week. No real advance and no real decline. A holding pattern of sorts. Because historical data is really your best friend when trying to figure out where markets or stocks are going to go, its important to note that larger moves in the market often follow small moves. Look to the left on the Dow chart above and also take some time this week to pull up weeklies on other major averages, sector indicies, and stocks and you will clearly see that doji type bars such as the one we had last week often preceed big body candles which are printed when the markets range expands dramatically. Its also a fed week as the FOMC will announce interest rate policy on Tuesday. This could be one reason for the tight range last week as traders and larger investors don't want to commit to positions ahead of the Fed. This first meeting under new fed chairman Bernanke will be the 15th straight meeting with a quarter point rate hike if the Committee decides to take the planned action that everyone is expecting. The next meeting after Tuesday will be in May and economists are generally split as to whether or not the Fed will continue to raise or pause at the spring meeting. Either way we know what we will do which is to stay the course with an overall and near-term long bias for now. ShadowTrader continues to favor strong stocks breaking out of sound, developed bases to the long side. Stay selective and on your toes.

Peter Reznicek is the Chief Equity Strategist and a principal of the Prana Fund, a domestic hedge fund, and ShadowTrader, a subsidiary of thinkorswim which provides coaching and education to its clients on both intraday and swing trading of equities. For a free trial to the full version of The Big Picture or to learn about ShadowTrader's other services, visit shadowtrader.net or send an email to preznicek@shadowtrader.net.