Good morning! Despite moving strongly higher into the open on Monday, the market was unable to hold onto those gains. The indices gapped right smack into strong price resistance from prior highs on the 15 minute charts from Thursday's close and this served as a concrete ceiling. The market didn't even try to break through it, it just gave in to the pressure and began to fill the gap.

The Nasdaq succeeded the most quickly, followed by the Dow and then the S&Ps. The S&Ps took a little longer since they had to deal with 5 minute 20 sma support that stood between it and the gap. This support zone hit around 10:00 ET and all three indices formed a small continuation short setup. The Nasdaq followed through the best on that continuation, selling off into 15 minute 200 sma support while the S&P 500 finally closed its gap. These support levels hit along with the 10:45 ET correction period and this helped the market pull up a bit into noon.

The indices fell into a nice continuation pattern on the 5 minute charts into lunch. The Nasdaq in particular had a solid triangle form along the lows. The volume declined as the market corrected off its morning support and when the 12:00 ET reversal period hit it kicked off another wave of selling on the intraday time frames. The reversal periods continued to hold well with a strong drop into 13:00 ET. Volume spiked as the indices hit support on the daily time frame. The Nasdaq came into its 10 day sma at that time, while the S&Ps tested its 20 day sma again. The Dow also came into support with its trend channel support zone. These three traits: the daily support, the volume exhaustion, and the correction period combined with support from the form of an equal move as compared to the initial drop allowed the indices to hold those early afternoon lows throughout the remainder of the day.

The pace or momentum of the decline from the open into 13:00 ET was stronger than average. The result was a more gradual counter-move off the support. The market crawled higher and the risk intraday on intraday setups due to the added chop, which by this time has become quite a staple for the market since many days recently have been spent in such a manner. By the end of the session, the Dow had fallen only 15.22 points though, despite the extent of the selling. The S&P 500 also experienced a mildly lower low with a loss of 1.82 points. The Nasdaq was hit the hardest and it fell 10.58 points, which meant a loss of -0.4% as compared to -0.1% in the other two indices. The momentum in the market heading into Tuesday remains more bearish.







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.