Good day! The market remained tame on Friday despite higher overall volume. The intraday activity increased slightly as compared to Thursday, but this can be attributed primarily to the early morning economic data. The consumer price index was of particular interest. It increased 0.2% in August, following a 0.4% gain in July. The core CPI rose 0.2%. This number excludes food and energy. The core CPI was in line with expectations, although the overall CPI was 0.1% lower than anticipated. The market jumped in the premarket on this muted inflation data, coming just days before this week's Fed meeting.

As soon as the market opened, the indices began to experience a bit of trouble holding onto their gains. The Dow Jones Ind. Ave. was able to form an upper level base, breaking higher into the 10:15 ET reversal period, with the Nasdaq Composite and S&P 500 also making one last hurrah. The extended daily charts and upcoming weekend made it difficult to sustain the move, however, and a slightly higher high on the spike formed a trap on the all sessions charts for the indices. (All sessions refers to both intraday and pre/post market trading.)

The accelerated pace on the upside flush made it more difficult for the market to gain comparable momentum on the downside, but the selling increased once the 5 minute 20 simple moving average support gave way. This brought the S&Ps back to morning lows and the Nasdaq into its 15 minute 20 sma support.

Despite the increased momentum, volume remained on the light side, indicating a lack of exhaustion. This made it easier for the indices to again attempt more selling into noon. The breakdown attempt got off to a bit early of a start, however, on both the 5 and 15 minute charts.

In order to put in a measured move, the indices will generally need to rest along the 15 minute 20 sma 1.5-2 times as long as it took them to move into that support to begin with. The market first gave a shot at another move lower out of the 12:00 ET reversal period. The result was a pop back into the 5 minute 20 sma before a second try at 12:30 ET. This was enough to close the gap zone in the Nasdaq and S&P 500, but the move was still early on the 15 minute charts and was moderated in the Dow and S&Ps, hitting the 5 minute 20 sma instead of falling off it.

13:00 ET is a strong time zone in the market for afternoon reversals. The momentum shift in the indices into that time on Friday helped the market move higher off the support at that time. The volume was again too light to sustain any decent momentum, however, and the indices had an impossible time trying to break free of the 15 minute 20 sma. The market rounded off into the close, pulling lower, but not enough to break the lows of the day.

This week is likely to get off a to a slower start than last. Most eyes will be watching the upcoming Fed announcement on Wednesday and will not want to commit much to new positions prior to it. The market has room to move either way on the daily charts since it's neither overbought nor oversold at this point. I had a difficult time finding decent setups on the daily charts in either direction that would yield new entries and still have strong reward potential. The main resistance the bulls will have to deal with are the prior highs from earlier in the year in the Dow and S&Ps. This could hit within a day of decent upside.

Economic Reports and Events
Sept. 18: Current Account for Q2 (8:30 am), Net Foreign Purchases for July (9:00 am)
Sept. 19: Building Permits for Aug. (8:30 am), PPI and Core PPI for Aug. (8:30 am)
Sept. 20: Crude Inventories 9/15 (10:20 am), FOMC policy statement (2:15 pm)
Sept. 21: Leading Indicators for Aug. (10:00 am), Philadelphia Fed for Sep. (12:00 pm)
Sept. 22: -

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.
Sept. 18: -
Sept. 19: AZO, CBRL, CHAP, CBK, ORCL, PRGS
Sept. 20: BBBY, BMET, KMX, CTAS, CC, CMTL, DRI, MS, XRTX
Sept. 21: COMS, COGN, CAG, FDX, GIS, NKE, PALM, RAD, SCHL
Sept. 22: -
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.