Good morning! The market remained in "frantic" mode on Thursday as volume continued to remain significantly higher than average and market participants rushed to offset positions. That base we had been following on Wednesday did end up breaking strongly lower, but it did so in afterhours trading, falling back into the previous lows in the Dow from Tuesday and well past them in the S&P 500 and Nasdaq Composite. This time around though, the indices behaved in a more typical fashion for an extreme gap in the overall market and within the first 15 minutes or so they were pulling higher off the intraday lows and breaking through the opening price resistance.

The market on the rally off lows slowed as the indices came into their 5 minute 20 sma resistance levels, but it continued to push higher until the gap zone finally filled around 11:30 ET. Volume declined over lunch throughout the reaction to the price resistance. The momentum remained light and choppy with slower overall moves to the downside as a trading range developed along the 15 minute 20 sma resistance. The market tried to break higher out of the 14:00 ET correction period, but the volume did not increase enough to confirm the attempt and the market gave up after bumping its head a few times on the 5 minute 200 sma resistance at more gradual pace each time. Finally it pulled back lower into the last hour of trading, but this selling still held the zone of the mid-day trading range and the volume continued to be lighter than it had out of the open.

By the end of the session the Dow ($INDU) had fallen 34 points (-0.3%), while the S&P 500 ($SPX) lost 3.65 points (-0.3%), and the Nasdaq Composite ($COMPX) slid another 11.94 points (-0.5%). Among the worst performers on the day were the banks, broad financials, semiconductors, and gold. All of them saw the strongest losses as a result of the morning downside, however, and only gold resumed that weakness into the afternoon. Some stocks did manage to buck the trend and close higher. These included the likes of AL, WLP, AAPL, MOT, ORCL, and DISH.







Volatility is going to remain high over the next couple of trading days at least. I am still seeing many charting and data providers struggle to keep up with this week's activity. A lot of traders are also seeing this reflected on their end as the data bogs down their inet and computer connections. A good way to combat this is to keep Level II screens to a minimum and keep as few active charts and minders as possible so that they aren't trying to update as much information at one time. It's pretty much the same strategy that I take heading into an FOMC announcement when that news can also rock the boat a bit.

Economic Reports and Events This Week
Friday:
10:00am. End-Feb Reuters/U Of Mich Consumer Sentiment Index. Previous: 93.3.

Key Earnings Announcements This Week
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.