Good morning! The indices have been moving higher in the premarket hours (4 hours left to go before Monday's open), but the buying is not particularly strong yet. Indecision permeated the markets throughout most of last week with a strong divergence between the Nasdaq Composite on the strong side and the S&P 500 falling. I didn't have much chance to follow the market as much as usual last week, so I focused more on simply scalping the E-Minis futures than anything else, and it was definitely a test of patience, with a great deal of danger for anyone attempting to do more than scalp.

Friday was typical for the week as a whole, with a great deal of back and forth action intraday as the indices continued their recent bias towards longer intraday trading ranges. The market moved lower into the open, continued with a strong breakdown out of the 10:15 ET correction period, and then found support with the 10:45 and 11:00 correction periods. The range that was set in this first hour and a half of trading held throughout the rest of the session and into the weekend, increasing in risk as it narrowed and the volume declined into the afternoon.

The morning declined created that larger bear flag intraday we were watching for in the Dow heading into Friday, but the momentum was not as strong as the descent from the day before, and instead the index began to constantly bang up against its 15 minute 20 period simple moving average. It hit is into noon on a lighter volume move to the upside, despite increasing pace in that direction. As it did so, the Nasdaq had also turned around off lows with a Reverse Head and Shoulders pattern on the 2 minute charts and was moving back into the morning congestion from 10:15 ET. The S&Ps, not to be left out of the fray, also returned to those early morning prices. That resistance hit heading into noon and the market dropped, attempting a retest of the morning lows. The S&Ps and Dow made it, but the Nasdaq fell a little bit short, hitting Thursday afternoon lows instead, while the other two hit the lower support.

The downside slowed into 13:00 ET as the indices began to hug their 15 minute 20 sma levels. As those broke, they triggered a buy setup into the second half of the afternoon, although the setup was choppy at best. The follow through was more difficult, with a retest of the range into the 14:00 ET reversal period before the market was able to make it back into the 10:15 highs. It was unable to break through them, however, and fell back a bit into the close without any strong reversal pattern.







The market is expected to have a more difficult time again this week, with concern over inflation and a slew of economic reports. As of yet, however, there isn't much for a decent reversal in bias to favor the bears, so I don't plan on being too aggressive in that direction just yet. True, the market is extended, but just because risk is increasing on long positions does not mean it's decreasing on the bearish side. At present it just means there is a lot of indecision, so a trader just has to be more patient, not push trades, and be particularly careful not to overtrade.

Economic Reports and Events This Week
Monday:
10:30a.m. Feb Dallas Fed Mfg Production Index. Previous: 13.8.
Tuesday:
7:45a.m. ICSC Chain Store Sales. Previous: -0.1%.
8:30a.m. Jan Durable Goods Orders. Previous: +2.9%.
8:55a.m. Redbook Retail Sales Index. Previous: -1.2%.
10:00a.m. Jan Existing Home Sales. Previous: -0.8%.
10:00a.m. Feb Richmond Fed Mfg Business Index.Previous: -11.
10:00a.m. Feb Conference Board Consumer Confidence. Previous: 110.3.
5:00p.m. ABC/Wash Post Consumer Conf. Previous: +1.
Wednesday:
7:30a.m. MBA Refinancing Index. Previous: -5.4%.
8:30a.m. 4Q Preliminary GDP. Previous: +3.5%.
10:00a.m. Feb Chicago Purchasing Managers Index. Previous: 48.8.
10:00a.m. Jan New Home Sales Previous: +4.8%.
Thursday:
8:30a.m. Feb Challenger Layoffs. Previous: +15.2%.
8:30a.m. Initial Jobless Claims. Previous: -27K.
8:30a.m. Jan Personal Income. Previous: +0.5%.
8:30a.m. Jan Personal Spending. Previous: +0.7%.
10:00a.m. DJ-BTMU Business Barometer For Feb 17. Previous: -0.2%.
10:00a.m. Feb ISM Manufacturing Business Index. Previous: 49.3.
10:00a.m. Jan Construction Spending. Previous: -0.4%.
N/A Feb Auto Sales.
Friday:
10:00am. End-Feb Reuters/U Of Mich Consumer Sentiment Index. Previous: 93.3.

Key Earnings Announcements This Week
Monday: ABBI, CRDN, ETM, JAKK, MVL, RMIX, XMSR, BRCD, COGT, FMCN, GSF, MRVL, MOBE, MRT, NTES, JWN, RIMG, URI, WSSI
Tuesday: ASTE, AZO, BBI, CBS, CMED, DYN, EP, FD, FST, FTO, HANS, HET, SIRI, TGT, TXU, VNO, ADBL, ADSK, DECK, DWA, LEAP, NVTL, WYNN
Wednesday: BRL, DLTR, WOLF, HSP, JOYG, KG, MSO, HAWK, SLXP, S, STN, VPHM, TFSM, LTD, NKTR, PETM, SONS, TRMA, UHS
Thursday: AACC, BNT, CALP, CKP, CDL, CTB, XXTI, XTEX, DISH, HLS, PLUG, BID, SHOO, VIA.B, JOBS, CBEY, CMOS, DELL, FLR, GPS, KSS, NOVL, SGMS, PAY
Friday: HRZ and METH
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.