Good morning! The market has not taken kindly to the overhead resistance that it's been banging up again in the last couple of sessions. It didn't quite hit the 20 and 50 day simple moving averages, but the S&P 500 had been stuck under its 100 day sma for three days and on Tuesday the market opened lower. The premarket selling had the aid of weak retail sales, which rose only 0.1% after remaining flat in January. They had been expected to rise 0.2%. The gap that followed did manage to find support right away out of the open though. All three of the indices opened into their 15 minute 200 simple moving averages intraday as well as price support from lows in the previous two days of trading. This helped them recover somewhat and let traders take some time to rethink their stance on the session.

The Nasdaq closed its morning gap within the first 30 minutes of trading, but the S&P 500 and Dow Jones Industrial Average ran into trouble pushing through their 5 minute 200 sma resistance intraday. The momentum simply wasn't there and volume dropped as the market pressed against 15 minute 20 sma resistance as well. The pace finally turned over into the 11:15 ET correction period and the sellers took over. This pressure escalated with news of record highs in the fourth quarter for homeowners unable to meet mortgage payments and entering into the foreclosure process.

One of the strongest moves to the downside came shortly after 12:00 ET when the lows of the day gave way. This took the Nasdaq into Friday's lows which served as the next support for the market while the S&P 500 and Dow had no difficulty breaking their equivalent. This early afternoon support came at about 12:30 ET as volume spiked and served as an exhaustion move. It didn't deter the sellers in the long run though. The market just plugged along at lows with the 5 minute 20 sma as resistance and after two bounces within the correction heading into that 5 minute resistance the bears again took over.

The remainder of the day was followed by continued downside, but with smaller bear flag on the 2 minute charts while the 5 minute 20 sma remained as resistance into the close. Each of the flags lasted approximately 30 minutes while the downside moves took about 15 minutes. The momentum did begin to change in the last hour or so when the upside increased modestly and this created more of a sideways range in the Nasdaq and S&P 500, but both still made new lows into the close.







When all said and done, the Dow Jones Industrial Average ($DJI) fell another 242.66 points (-2%), while the S&P 500 ($SPX) lose 28.65 points (-2%), and the Nasdaq Composite ($COMPX) shed 51.72 points (-2.2%). With this most recent action, it seems most plausible that the indices will fail to develop a weekly triangle just yet since they would have needed to have pushed up past those 50% retracement levels off the highs. Instead the 200 day simple moving averages are going to be a magnet that will attract further selling.

Economic Reports and Events This Week
Wednesday:
7:45a.m. MBA Refinancing Index. Previous: +15%.
8:30a.m. Feb Import Prices. Previous: -1.2%.
8:30a.m. 4Q Current Account Gap. Previous: $225.6B.
Thursday:
8:30a.m. Initial Jobless Claims. Previous: -10K.
8:30a.m. Feb Producer Price Index. Previous: -0.6%.
8:30a.m Feb Producer Price Index, Ex-Food & Energy. Previous: +0.2%.
8:30a.m. Mar NY Fed Manufacturing Index. Previous: 24.35.
9:00a.m. Jan Treasury Intl Capital Flows. Previous: -$11.0B.
10:00a.m. DJ-BTMU Business Barometer. Previous: -0.2%.
10:00a.m Mar Philadelphia Fed Business Index. Previous: 0.6.
Friday:
8:30a.m. Feb Consumer Price Index. Previous: +0.2%.
8:30a.m. Feb Consumer Price Index, Ex-Food & Energy. Previous: +0.3%.
9:15a.m. Feb Industrial Production. Previous: -0.5%.
9:15a.m. Feb Capacity Utilization. Previous: 81.2%.
10:00a.m. Mid-Mar Reuters/U Of Mich Sentiment Index. Previous: 91.3.

Key Earnings Announcements This Week
Wednesday: CBM, HIBB, HOTT, JUPM, LEH, TRK, SSI
Thursday: ARO, BSC, BONT, CLE, LGND, PSUN, TRLG
Friday: ANN, KIRK
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.