Weekly losses on the major indices now rest at four weeks. Renewed fears of a global slowdown and foreign government debt have weighed heavily on the markets since the beginning of the New Year. The added worries have brought volatility back into the equity markets. The $VIX has rose 22% in the last four trading sessions, signaling more indecisiveness to come.

Domestically, the economy continues to look as though it is stabilizing. On Friday, it was announced that the nation’s unemployment rate declined to 9.7% from 10% the previous month. President Obama is urging Congress to back his plan to take $33 billion from the leftover TARP funds and issue tax cuts and hiring incentives for small businesses.

Despite three triple-digit moves last week in the DOW, the index closed the week down only -0.6%. After trading down as much as -167 points intraday, the index reversed late in the session to close up on the day. The S&P 500 ended the week at 1,066, bouncing 24 points higher in the last hour of trading alone.

Looking forward to this week, investors will be watching the Treasury budget release on Wednesday and the retail sales figures on Thursday. We are looking for a technical bounce in equities and weakness in the dollar.

Another strong technical week for the Russell index. After rallying up to the 600 level on Tuesday, the Russell pulled all the way back to the 200-day moving average Friday before bouncing. This signals a possible re-test of the 600 level this coming week.

The afternoon rally on Friday was impressive to say the least. Dip buyers stepped in on all major indices in the afternoon and were able to wipe out heavy morning losses. This is technically bullish for the upcoming week as long as the worries of international debt do not arise again.