With February in the books, the S&P500 closed the final week of trading down 0.4% but still ended the month up 2.9%. The NASDAQ continues to be the strongest index in terms of gains, up 4.2% for the month. Domestic earnings continue to be strong, but renewed concerns over Greece and new worries about Spain and other European Union nations have led to whipsaw in the equity and debt markets.

Friday’s announcement that GDP grew at a 5.9% annual rate in quarter four of 2009 was a strong sign that the economy continues to improve. However consumer confidence continues to crumble as households remain concerned over the future of the economy.

Looking forward to this week, there are a few more important earnings announcements remaining, with Costco (COST) and Marvel Technology (MRVL) reporting. Investors’ focus will be on some key economic announcements however. ISM Manufacturing numbers are set to be released before the market opens on Monday and the unemployment rate on Friday. Expect more volatility in the market in response to these numbers.

Overall equity markets continue to push higher, but not at the same rates as in 2009. Dips are still being bought heavily and are seen as buying opportunities by major investment firms. If economic indicators continue to show improvement, look for continued buying momentum to the upside. The wildcard is that Treasuries continue to gain momentum as well. We feel this means an explosive move one way or the other seems to be in the cards for March.

Regarding the Russell 2000, as we talked about last week, waiting for a pullback before going long the index was important. We got that pullback on Tuesday and again on Thursday. Both times, the Russell bounced perfectly off the 620 level. It ended the week at 628, which we feel is still a strong entry point for Monday.

If the index can get a little momentum behind it and the dollar can continue to strengthen, look for a breakout this week. We recommend an entry on any pullbacks Monday, with a stop at 615 and a target of 640 by the end of the week.