Good morning! So far this week I am rather unimpressed with the trading activity. Volume has been at some of its lightest levels of the year and the indices have had a difficult time budging. The market had favored a downside bias intraday into the open on Wednesday, and although it held it very well, it had a little help. The consumer price index rose 0.2% in January, as compared to expectations of a 0.1% increase, and the market did not take kindly to the surprise. The indices gapped sharply lower, falling right into the prior day's lows in the S&P 500 and the 5 minute 200 sma intraday in the Nasdaq 100.

Unlike in stocks, larger than average gaps in the indices like to try to fill more often than not on the day of the gap. The larger support levels provided assistance in this endeavor, however, the blue-chips were weighed down by earnings news from Hewlett-Packard, which fell 4.7% in the session after beating earning expectations, but dampening their outlook. As a result, resistance from the intraday opening highs and the Dow's 5 minute 200 sma held it and the S&P down even while the Nasdaq began to climb slowly and hesitantly off the lows.

It was not until after 10:30 ET that the Dow and S&Ps finally decided to join in the trek. Like out-of-shape hikers, the indices made their way up the hill that was the "mid-day doldrums". The S&Ps began to feel trouble when they hit their own 5 minute 200 sma overhead and the Nasdaq came into the prior day's highs. The 13:00 ET reversal period held firmly at that juncture and refused to allow the bulls to pass. They didn't seem to have the heart to press ahead either and quickly stumbled, giving back a good chunk of the day's progress in a matter of minutes.







The indices did recover following the release of the FOMC Minutes at 14:00, but an initial pop on the 1 minute time frame could not sustain a stronger move into the close. Instead the mid-day pace resumed in the Nasdaq after basing along the 5 minute 20 sma and breaking higher, while the S&P 500 and Dow continued to struggle and ended up holding the earlier afternoon highs. The result was a gain of 5.38 points in the Nasdaq Composite, a loss of 2.05 points in the S&P 500, and an even stronger decline of 48.23 points in the Dow Jones Industrial Average.

Economic Reports and Events This Week

Monday: -
Tuesday: -
Wednesday: CPI and Core CPI for Jan. (8:30 am), Leading Indicators for Jan. (10:00 am), Crude Inventories 2/16 (10:30 am), FOMC Minutes - Jan. 31 (2:00 pm)
Thursday: Initial Claims 2/17 (8:30 am), Help-Wanted Index for Jan. (10:00 am)
Friday: -

Key Earnings Announcements This Week
Monday:
Tuesday:
Wednesday: ANF, AEM, EFD, EEFT, FRP, GPI, HSIC, IHP, JBX, LEXG, LOJN, MT, NTBK, NICE, ORB, PAAS, PDLI, PRFT, POSS, TRK, STXS, TASR, TWB, ZLC
Thursday: AZ, AGIX, ABX, BEAS, CHK, DNR, BOOM, HLTH, ENDP, ESV, FBR, HRB, HMA, HPT, IMH, INWK, INPC, INTU, SFI, JCP, KSE, LAMR, MEMY, MDG, MOVE, NXL, NAM, NBL, OMX, PKD, PDCO, PTEN, PCG, PXP, PGI, QLTI, PWR, RTI, SWY, SRE, SM, TELK, TOL, LNUX, WMB
Friday: AVR, CCU, CTV, LOW, SWC, WRI
Note: All economic numbers and earnings reports are in lines with those compiled by Yahoo Finance and Briefing.com. Occasionally changes will occur that are made after the posting of this column. This list is not a complete list of earnings, so always double check your positions!

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.