Good morning! The volume and volatility in the market place remained high on Wednesday after the indices plunged on throughout Tuesday's session, and although the indices did manage to recover some of the losses, all three of the major indices closer lower to end the month. At the start of the day I continued to have trouble with accurate data, as did many of the other traders I talked with at that time, despite using different platforms. The lack of reliability led me to decide not to trade, but I still followed along for most of the day to just keep in touch with things. The support and resistance levels did hold well though, despite my lack of confidence in my quotes.

The day began on Wednesday with a lot of chop. The indices opened without much change from the prior day's close and continued to just bounce around on the 5 minute charts for the first 45 minutes of the day. The Nasdaq displayed greater relative weakness and sold off to a slightly lower low, creating a 2B reversal pattern off those lows on the 15 minute charts, while the S&P 500 and Dow Jones Industrial Average continued to hug their 5 minute 20 period simple moving averages during that time.

The momentum turned over gradually within this range and broke higher out of the correction period, leading to new highs on the day. The rally continued until all three indices were back at their 15 minute 20 sma levels and previous highs on the 5 minute charts from Tuesday afternoon. These hit at the same time as the 10:45 ET correction period and that helped stall the buyers as well. The strong initial flush off these highs, while short-lived to begin with, indicated that the indices would fall into a trading range heading into the afternoon.







The pace turned over more strongly after forming a small avalanche coming off the highs. This led to a strong drop into 12:00 ET and that mid-day correction period. From that point onward, however, the range narrowed slightly, and even though the market attempted to break lower again off highs at 13:30 ET, it was unable to regain enough momentum to push through the prior lows and held that price support at 14:30, returning to the highs of the range within the last hour of the day. These also held well.

By the close, the Dow Jones Ind. Ave. ($INDU) gained 52.39 points (+0.4%). The S&P 500 ($SPX) rose 7.78 points (+0.6%). The Nasdaq Composite ($COMPX) had the smallest increase, moving up by 8.29 points (+0.3%). Most of the top gainers on the day were thinner stocks you don't usually run across, which to me always indicates a higher level of risk. There were some more well-known stocks that did move pretty well, but most of the buying was still in the morning and much of the day was stuck in a range. These gainers included PG, DIS, MO and VZ. Even though the overall market did manage to bounce back a bit, some which did not were CAT, DD, FMT, and HD. They also had trouble putting in a trend day, and saw most of their losses early on.

The range on Wednesday created a base on the 30 and 60 minute charts that suggests another move lower on Thursday. If the morning economic data comes in with any shade of concern, then we can easily see another test of Tuesday's lows.

Economic Reports and Events This Week
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
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.