Good morning! The market was pretty slow on Monday ahead of Tuesday's Fed meeting. Volume was only 1.36 billion shares on the Big Board and 1.87 billion on the Nasdaq. Airlines, gold stocks and transportation stocks all saw the strongest gains on the day with drug stocks and utilities posting a lot of weakness. By the close the Dow closed lower by 29.86 points at 11,250.11, while the S&P 500 lost 1.34 points to end the day at 1,301.61. The Nasdaq managed to gain 2.76 points to finish at 2,315.58.

The Nasdaq led the way higher soon after the open, but the move was short-lived. After rallying into the prior day's highs, the Nasdaq stalled and the subsequent pullback took the S&P500 and Dow with it. Both had a harder time moving higher out of the open and were unable to break the 5 minute 20 sma, which served as resistance leading into the correction. The pace was strong as the market fell from morning highs, making a slower bounce favorable for a continuation pattern. This bear flag then led to a third wave of selling in the S&P 500 and Dow on the morning and made a larger correction to the selling over noon more likely.

The S&P 500 and Dow both put in some slightly lower lows after resting a bit longer into 12:00 ET. This led to the formation of a 2B reversal pattern in the S&P 500. The Nasdaq, continuing to show relative strength, hugged the 5 minute 20 sma during this time, also triggering an upside move into the early afternoon as the 5 minute 20 sma broke higher. The move was brief, lasting only about an hour, but it was enough to bring the S&P 500 back into morning highs before becoming more choppy for the remainder of the day.

The indices switched places for a bit ahead of the close with the Dow leading the way higher. As resistance hit once more with the 5 minute 200 sma intraday on the Dow and prior highs on the S&P 500 and Nasdaq, the market stalled again and pulled back slowly but surely into the close. After the initial morning selling, the volume in the market continued to decline and remained very light into the afternoon.

On Tuesday, the main economic event will be the afternoon Fed. announcement. While not perfect, a typical Fed day commences with some upside action in the morning, followed by very light and risky mid-day activity. Daytrading will be especially difficult with the announcement itself due to an influx of volume and volatility. The market will usually break one way to start with, correct to that move (sometimes to a greater extent than the prior move) and then continue in the initial direction. It appears probable that there will be another rate hike, taking the short-term rate from its current 4.5% to 4.75%. No one is anticipating any surprises.

Economic Reports and Events
Mar 28: Consumer Confidence for March (10:00 AM ET), FOMC Policy Statement (2:15 PM ET)
Mar 29: Crude Inventories for 3/24 (10:30 AM ET)
Mar 30: Chain Deflator-Final and GDP-Final for Q4 (8:30 AM ET), Initial Claims 3/25 (8:30 AMET), Help-Wanted Index for Feb (10:00 AM ET)
Mar 31: Personal Income and Personal Spending for Feb. (8:30 AM ET), Mich. Sentiment-Rev. for March (9:50 AM ET), Chicago PMI for March and Factory Orders for Feb. (10:00 AM ET)

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 28: LEN (B), PAYX (A), RHAT (A), TIBX (A), TIF (B)
Mar 29: RECN (A), RI (A),
Mar 30: ACN (A), ATYT (B), BBY (B), KMX (B), COGN (A), PRLS (A), TXI (B),
Mar 31: -
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.