The second half of the session brought a slight uptick in volatility but the Dow Jones Industrial Average (DJIA) still finished near breakeven. Selling pressure picked up early in the afternoon and pushed the Dow to a new low for the day. As the loss neared 100 points, a snapback rally kicked in. The end result was a set of whipsaw moves that left the DJIA bouncing between its lows and breakeven. The session ended with the Dow and S&P 500 (SPX) near breakeven. The Nasdaq Composite (COMP) posted a moderate gain while the Russell 2000 (RUT) advanced 1%.

The sector action was mixed and sporadic. The Amex Biotech Index (BTK) and US Oil Fund (USO) each gained nearly 4%. The Regional Bank HOLDRS (RKH), Broker/Dealer Index (XBD), Oil Service HOLDRS (OIH), and Amex Gold Bugs Index (HUI) each gained around 2%. The S&P Retail Index (RLX), Dow Jones Transport Index (.TRAN), Cyclical Index (CYC), and PowerShares Clean Energy ETF (PBW) each lost 1%.

Earlier I checked in on the longer-term view so I want to jump back to the shorter-term perspective. Yesterday I touched on the waning momentum and the tendency for expiration weeks to be strong. Last night's losses left the indices in a hole for the week and today's mixed, but mostly quiet, action didn't offer much help.

One very short-term level I am watching here is the "mini-low" that was put in just before Christmas. The 30-minute chart below shows the action for the last 20 days and focuses in on what I am watching. Here you can see that "low" and the subsequent bounce. You can also see the short-term downtrend currently in place. At this point the market has given that bounce back so we need to watch for a potential breakdown below those lows. And that is where I will pick up in the morning. Have a nice evening.

Chart Courtesy of Thomson Financial

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Charts Courtesy of Thomson Financial

Chart Courtesy of Thomson Financial