Good day! As the indices came into the zone from February's highs over the last couple of days, the market has had a more difficult time adding to the gains on the week. The day began on Wednesday with a gap lower, hitting a lot of price support into the open at previous lows on the 15 minute time frame. The indices were not terribly excited at first though. It took about 45 minutes of the sellers trying to push the market lower before the bulls returned. The S&P 500 ($SPX) and Dow ($DJI) gaps quickly closed, but the Nasdaq ($COMPX) had a bit more difficulty and only made it back to its 5 minute 20 sma resistance before stalling.

A small base formed along the resistance as volume declined into the 11:00 ET reversal period. The declining volume within the correction indicated a lack of strong bearish sentiment. The result was a rapid breakout with the reversal period, allowing the Nasdaq to pull into its gap zone. At the same time, the Dow ran into its previous highs on the 15 minute chart from Tuesday afternoon. This pushed the market sideways into lunch. The momentum had attempted to turn back around at that time, but only the Nasdaq showed any real propensity towards weakness, taking back about half the day's gains before turning back around into the early afternoon.

By hugging the upper trend line and forming a reverse head and shoulders pattern on the 15 minute S&P 500, I began to have a more bullish bias into the afternoon, but the market remained quite choppy throughout most of it. It wasn't until the 15:00 ET correction period when the indices hit the 5 minute 20 sma zone that the market regained the upside momentum it had experienced earlier in the session.







The afternoon breakout took the Dow to new all-time highs. The Nasdaq caught up with its previous day's highs at the same time and this ended the rally. It was followed by a strong turnover into the last 30 minutes of trading, taking the indices back into the mid-day range. The brought the Nasdaq back into negative territory. It closed with a 6.45 point loss, although the S&P 500 gained 1.02 points and the stronger Dow climbed 30.80 points. JPM and BA helped a lot with the Dow's gains. Each rallied 3.8% on the day. The buying is likely to continue to slow the remainder of the week, as it continues to round off at February's highs.

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.