Good morning! The market now has a week of trading under its belt since last Tuesday's monumental selloff. As expected, volatility remains high, but technically speaking the market is behaving quite well. Support and resistance, trend development, reversal periods, etc. all held well. The day began with another good-sized gap to the downside, which promptly began to fill out of the open. Three waves of buying on the 1-2 minute time frame followed, closing the gap early on in the session. This took the indices into 15 minute 20 sma resistance as well, hitting with the 10:15 ET reversal period and leading to the beginning of a late-morning reversal.

The momentum shifted after 10:15. The indices corrected longer on the 5 minute time frame, but volume dropped as it did so and the market popped a final time into the 11:15 ET reversal period. This took the S&P 500 and Dow Jones Ind. to very slightly higher highs, creating a 2T double top that helped turn the market over into lunch.

The choppy trading continued at that time with a lot of overlap from bar to bar on the 5 minute time frames. The market just slid lower, slowing at 12:00 ET and then rounding off at support. The pace of the selling slowed with a more gradual move along resistance into 13:30 ET before the indices broke higher at that time. They popped back into the morning trading levels, hitting them at 14:00 ET.

Even though the market tried to turn back around into the early afternoon, when the indices came back into the resistance on the 5 and 15 minute time frames, they reacted strongly. There was a sharp pullback into the 5 minute 20 sma, followed by an Avalanche when they hugged the support and it broke lower into the 15:00 ET reversal period. Then it continued lower into 15:30 after pulling into the 5 minute 20 sma. This earlier support level had become resistance and the result was a break to new intraday lows in the S&P 500.







I am still looking for more weakness into Tuesday. I would like to see a strong test of the 200 day sma in the Nasdaq to really provide a more solid daily support level. Due to the choppier action with a slower overall decline in the last couple of days, the market can rapidly surge intraday like it did on Monday afternoon, but to a greater degree, so I'll be monitoring the intraday momentum changes very closely.

Economic Reports and Events This Week
Tuesday: Productivity-Rev. for Q4 (8:30), Factory Orders for Jan. (10:00 am)
Wednesday: Crude Inventories 3/2 (10:30 am), Fed's Beige Book (2:00), Consumer Credit for Jan. (3:00 pm)
Thursday: Initial Claims 3/3 (8:30 am)
Friday: Average Workweek, Hourly Earnings, Nonfarm Payrolls, and Unemployment Rate for Feb. (8:30 am), Trade Balance for Jan. (8:30 am), Wholesale Inventories for Jan. (10:00 am)

Key Earnings Announcements This Week
Tuesday: CNO, CPRT, ICON, OPSW, PSS, QMAR, TSU, VOL, WRES
Wednesday: AEOS, BJ, CNQ, CWTR, RIO, CPA, FLML, FCEL, HMIN, KTO, MAMA, MATK, MW, PVX, SFNT, SKS, TLB, TIVO, WON
Thursday: AEG, ALTI, CNE, COST, FLE, GMKT, GG, HOV, ISIS, JUPM, NSM, NTO, SFE, TECD, TNE, OVEN, URBN, WIND, XOMA
Friday: BIG, ENCY
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.