DJIA >>> A Soft Week Ending To A Hard Month

Shaky Data Failed To Traumatise Investors
Trading volume was remarkably light for most of the session, as a blizzard pounded New York City and kept many traders away from their desks through the first half of the day.

However, the relatively barren trading conditions didn't translate to any violent, whipsaw moves in the equities market. Despite bouncing between positive and negative territory, stocks didn't stray too far from the breakeven line. A dose of upbeat economic data helped to tip the scales in the bulls' favor.

After a few days where the Dow posted relatively large intraday moves, the average never strayed more than 50 points from the breakeven line today. Against this backdrop, stocks were able to end the month of February on a modestly positive note.

The Dow Jones Industrial Average (DJIA – 10,325.26) settled for a slim gain of 4.2 points, or 0.04%, as 14 of its 30 components trekked higher. JPMorgan Chase (JPM) paced the advancing equities, while Kraft Foods (KFT) swallowed the steepest percentage loss among the 15 decliners. Meanwhile, shares of Cisco Systems (CSCO) finished flat. The Dow gave up 0.7% this week, but added 2.6% during the month of February. The blue-chip barometer settled today just fractions of a point below its 10-week moving average, but it's still holding support at its 10-day and 20-day trendlines.

The S&P 500 Index (SPX – 1,104.49) eked out a daily gain of just 1.6 points, or 0.1%. The index lost 0.4% this week, but rose 2.9% for the month. The SPX is still perched above its 10-day moving average, and finished flush with its 10-week trendline. Finally, the Nasdaq Composite (COMP – 2,238.26) enjoyed the day's healthiest climb, rising 4 points, or 0.2%, by the close. The COMP shed just 0.3% for the week, and ended February with a robust gain of 4.2%. Unlike its peers, the COMP finished comfortably above its 10-week moving average.

We have been consistently noting that the intermediate-term up trends were still intact. However, I began this week saying the broad market indexes were stuck in the middle of nowhere as far as near-term support and resistance. My takeaway there was that we could see the blue chips swing a couple of hundred points in either direction without hitting any significant levels.

Tuesday afternoon brought a 100-point drop that I largely ignored. Wednesday started with a 95-point gain that I disregarded as well. Yesterday, of course, had it all with a morning loss and an afternoon rally that I described as akin to drunken fisherman standing in a small boat. My reason for recounting all of this is to put the weekly charts below in perspective...

For much of this week I had stressed the word patience. To be honest much of the reason for the constant reminder is for my own benefit. It is very easy to get caught up in the moment when watching intraday ticks.

(At least that is a weakness of mine.) In a whipsaw environment like this, that can be very dangerous. After everything was said and done, the Dow finished the week with a loss of just 77 points, 0.74%. The other indexes posted even smaller losses.

In other words, there was plenty of opportunity to get "pulled in" but there was virtually no net movement this week. The near-term action may still be choppy but the charts above reflect the current uptrends as they continue to evolve. I think that is the point to keep in mind.

And until I see you guys on Monday, this is where I will sign off.

Have a great weekend.