Disappointing Kickoff for the Third Quarter

Disappointing Kickoff for the Third Quarter

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)
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Good day! I know, the title for today's column seems a little strange given the fact that all three of the major U.S. indices posted gains on Wednesday. Let's take a closer look at the day's action, however, and you will soon see that despite the gains, the market's performance on Wednesday was anything but stellar. As we expected heading into this short, but data-packed trading week, the market has been on quite a roller coaster ride.

The economic data has whipped the market around one way and then the next since Monday morning and has been the driving force in morning action. The primary reason for such strong, short-term impacts is the fact that the indices are quite extended on the weekly and even monthly time frames and everyone is jumping over themselves trying to decide whether or not the market can push to another higher before correcting or if this is all there is for now and that larger weekly correction will hold last month's highs.

Dow Jones Industrial Average ($DJI)


In Tuesday's session the market turned around off lows with a shift in momentum to create a rounded low mid-day and into the afternoon. The right side of this bowl formation could have fallen into a longer trading range, but the market was propelled higher once again on the short-term time frames thanks to positive economic data on Wednesday morning.

The Institute for Supply Management manufacturing index rose from 42.8 in May to 44.8 in June. This is the strongest level since September. This was lower than expected and still under 50, indicating contraction, but the increase suggested that the worst could be over. The market did flush lower at 10:00 ET, but reversed again very quickly back to highs. In other news, the National Association of Realtors' Pending Home Sales Index rose 0.1% in May. This was the fourth month in a row, which was the first time the market had seen a 4-month increase since 2004.

S&P 500 ($SPX)


The market rallied into 10:30 ET, pushing sharply into the resistance from the previous day's highs. Since the momentum was so strong into this resistance zone, the indices actually managed a slightly higher high, but held the resistance zone and pulled back into the 5 minute 20 sma where they congested throughout mid-day. The momentum continued to weaken at this point with a series of steps lower on increasing momentum. After the market broke lower out of the mid-day range the 5 minute 20 sma served as resistance.

As I mentioned in the opening paragraph, the market closed higher on Wednesday, but the action was still not positive. This was due to the reversal off the intraday highs and the fact that momentum rose throughout the afternoon on the downside. The slightly higher highs in the morning created a trap and the market had already put in three waves of buying on a 30 minute time frame, so this served to round off highs on that same time frame, which means that it would be very easy for the indices to continue to display weakness into next week. The potential still remains for one more test of highs on the daily time frame, but this intraday action is going to make it more difficult on the S&Ps and Dow and makes the market even more at risk of a larger flush lower.

On Thursday the Bureau of Labor Statistics will be publishing the official estimates for Nonfarm Payrolls. May factory orders are also due to be released. The U.S. markets are closed on Friday in observance of the 4th of July holiday, so expect action to be particularly light on Thursday once we get past the morning's economic news.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) rose 57.06 points, or 0.68%, to close at 8,504.06 on Wednesday.Kraft (KFT) ended the session well ahead of the rest of the Dow's 30 index components with a gain of 5.01%. This came after General Mills (GIS) raised its 2010 guidance, providing a boost for food stocks. Next in line was Intel (INTC) with a gain of 2.96%, followed by Coca-Cola (KO) with a gain of 2.48%. The main losers were the financials. Bank of America (BAC) fell 1.14%, followed by a 1.03% loss in American Express (AXP), and a 0.85% loss in JP Morgan (JPM).

The S&P 500 ($SPX) climbed 4.01 points, or 0.44%, and closed at 923.33. Crude oil futures fell 0.8% to $69.31 for the day after hitting $71.85 a barrel earlier in the session. The American Petroleum Institute reported that crude supplies fell 6.8 million barrels last week to 349.7 million barrels, while the Energy Information Administration reported a drop of 3.7 million barrels in crude supplies. This was greater than expected. Oil companies Exxon Mobil (XOM) and Chevron (CVX) were also up despite the crude decline. Although oil supplies were lower, gasoline supplies rose well over 2 million barrels. Retail gasoline prices averaged $2.63 a gallon with a year-to-date increase of 62.64%.

The Nasdaq Composite ($COMPX) added 10.68 points, or 0.58%, and it closed at 1,845.72 on Wednesday. Tech stocks were strong and the Philadelphia Semiconductor Index ($SOX) did particularly well and was up 1.5% with each of its 19 stocks closing higher.

Monday's Rally Falls Apart on Heels of Economic Data

Today's Commentary:
Note: Current contract month for the futures is now September.

Monday's Rally Falls Apart on Heels of Economic Data

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)

Good day! The indices opened well on Tuesday morning. They had held the previous afternoon's range into the open and pushed higher for the first 15 minutes of the day. Then the 9:45 ET correction period hit. It is common for the market to reverse course at this point and this was the case on Tuesday as well.

The reversal off highs was assisted by some rather disappointing economic data. Even though home prices declined by less than had been expected, down 18.1% year-over-year in April, the S&P/Case Shiller home price index still continued to decline. It has done so ever since July 2006.

The Conference Board's consumer confidence index was even more dismal and had the greatest impact on the morning's intraday action. The June reading on consumer confidence fell to 49.3 in June. It had been revised to 54.9 in May and economists were expecting it to increase to 55.3. The reaction was immediate. The market gave way to a sharp wave of selling that quickly wiped out the previous day's gains.

Dow Jones Industrial Average ($DJI)


The follow-through on the report led to three distinct waves of selling on the S&P 500 on a 2 minute time frame. The trend exhausted itself into 10:30 ET and the market held support for awhile as it adjusted to the pace of the extreme selloff. It was too steep to prevent further erosion in prices, however, and the S&P and Dow both stepped lower into 11:30 ET. This shifted the pace in that index to created a momentum reversal that pulled the indices higher into 12:30 ET.

The Nasdaq bounced more strongly off the 10:30 ET lows, so it didn't experience the rounded lows seen in the S&Ps and Dow. This made it easier for this index to test slightly lower lows mid-day. It also created a momentum reversal, but it did so on the 15 minute time frame instead of the 5 minute, which allowed for a stronger reaction into the close. It triggered coming out of the 14:00 ET correction period, which also corresponded to a 15 minute Phoenix™ trigger in the S&Ps and Dow.

Once the 5 minute 20 sma broke on the upside it served as support and held throughout the remainder of the session. All three of the major indices ran into trouble with the 5 minute 200 sma however in the final 30 minutes of trade and fell into a range into afterhours trade while it corrected off that resistance level.

S&P 500 ($SPX)


This week's heavy economic data front continues on Wednesday when the ISM's Manufacturing results will shed further light on the state of the economy. This will be followed on Thursday by the Bureau of Labor Statistics publishing the official estimates for Nonfarm Payrolls. These both have the potential to swing things around over the next two days, particularly if the data doesn't fall in line with expectations. Remember: The U.S. markets are closed on Friday in observance of the 4th of July holiday, so expect action to be particularly light on Thursday.

My larger daily outlook remains the same as yesterday and I continue to favor a larger time frame correction in the making. The pace of the current correction higher off the daily support is enough to allow the markets to attempt a retest of the highs or even a slightly higher high, but this would merely serve to shift the pace of the buying even further and increase the risk for a more rapid price correction on the weekly time frame as opposed to a correction over time with an extended congestion zone.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) fell 82.38 points, or 0.97%, to close at 8,447.00 on Tuesday. The index ended the quarter higher by 11%. This was the best quarterly return in 6 years. It was down 0.6% in June and down 3.8% year-to-date. Six of the Dow's 30 index components closed in positive territory despite the large losses seen throughout the morning. They included Intel (INTC) with a gain of 1.04%, McDonald's (MCD), Merck (MRK), 3M (MMM), Bank of America (BAC), and Travelers (TRV). The last 5 had fractional gains. Caterpillar (CAT) was the largest decliner, down 4.89%, followed by a 2.43% loss in American Express (AXP), and a 2.16% loss in Procter & Gamble (PG).

The S&P 500 ($SPX) fell 7.91 points, or 0.85%, and closed at 919.32. The index ended the quarter higher by 15.2%, which is its best quarterly performance in over 10 years. It remained virtually flat for the month of June and is up 1.8% year-to-date. Crude oil futures were down from $71.49 to $69.89 a barrel, and continues to remain in a congestive zone on the daily time frame that can easily last for several more weeks due to the 200 day simple moving average resistance lingering overhead.

The Nasdaq Composite ($COMPX) fell 9.02 points, or 0.49%, and it closed at 1,835.04 on Tuesday. The Nasdaq has been the best-performing index for the year-to-date and is up 16.4%. It is up 20.1% for the quarter and ended the month of June higher by 3.4%.

Forex Outlook:
The GBP/USD pair saw a strong breakout trigger as a buy signal on Monday. As I mentioned yesterday, the weekly trend is extended and has potential to create the handle on a weekly cup-with-handle. This played a role in the early morning turn-around on Tuesday, but not before it hit new highs for the year, which could have trapped a number of late breakout players not paying enough attention to the larger trend.
The NZD/USD pair also broke higher on Monday and continued into Tuesday morning. Like the GBP/USD, this breakout also is plagued by higher risk, so upside continuation activity is bound to be choppy. Pay attention to changes in momentum on a 60 minute with slower upside that can indicated sharp downside flushes.
The USD/JPY is forming a weekly Phoenix™.
The USD/CHF is forming a weekly bear flag, but can easily hold the congestion for another month. It was only a few days ago that China urged the creation of a new international currency, but backtracked off the hard-line on Monday morning and stated that it didn't wish to see any sudden policy changes.
The USD/CZK hit strong daily support on Tuesday and is poised to continue to correct higher off this zone with the 20 and 50 day simple moving averages acting as primary resistance levels.
Although not a popular pair, the USD/LVL (LVL=Latvian Lats) is forming a daily reverse head-and-shoulders buy setup after two waves of weekly selling into strong monthly support and looks to head higher into the end of the summer.

Market Jumps Higher to Kick Off Shortened Week

Today's Commentary:
Note: Current contract month for the futures is now September.

Market Jumps Higher to Kick Off Shortened Week

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)

Good day! Despite a hesitant open, the market really took off on Monday morning. The indices had been poised to open substantially lower when I wrote Monday's column. They had broken down out of a low-level pace with pace favoring the bears. Once the S&P 500 e-mini futures hit equal move support on the all-sessions time frame at 2:00 am ET, however, the market mounted a rapid recovery. The indices took about an hour to roll over off lows, but by the time the 3:00 ET correction period hit they were ready to rock and roll.

The premarket recovery was a swift one. Two waves of upside on the 15 minute charts took the S&Ps back into Friday's afternoon highs. The index futures did create a corrective pattern coming off that resistance. This can be seen perhaps the best in the S&Ps where a solid momentum reversal was formed that triggered into 8:30 am ET. The momentum began to shift around 6:15 ET and this eventually led to a rapid drop into the opening bell from a small Avalanche on the 5 minute charts that triggered at about the same time as the bell.

Dow Jones Industrial Average ($DJI)


The indices experienced strong follow-through on the opening short setup. The Nasdaq had swapped places with the S&Ps and Dow and was the weakest of the three major indices on Monday morning. It continued to fall out of the open until running smack into strong price support from the 2:00 am ET premarket lows. This level hit at about 10:00 am ET and this time zone held the lows in the S&Ps and Dow as well as the Nasdaq e-minis.

The market turned very quickly higher off the morning lows. The reversal was more rapid than in the premarket. The indices shot higher and established an average day's range in a matter of minutes. The yield on the 10-year Treasury note fell to 3.49% from 3.51% on Friday and this translated into lower interest rates. The financials did very well as a result.

S&P 500 ($SPX)


The indices stalled around 10:45 ET and held resistance quite well for the remainder of the session. The 5 minute 20 sma served as initial support, but only the Dow showed a decent reactionary move. The morning's upside extension prevented the indices from pushing much highs. The Dow formed a double top into the early afternoon and the indices moved lower into the early afternoon. A 5 minute Avalanche out of the 14:00 ET correction period took the indices into 15 minute 20 sma support, but the market failed hug the support and instead the Dow and S&Ps returned to the upper end of the trading range intraday and then broke lower into the final correction period at 15:30 ET. The 5 minute 200 sma served as support in the Nasdaq. None of the late-day action was strong enough to break the indices out of the afternoon's range throughout the remainder of the trading day (including afterhours trade.)

Nasdaq Composite ($COMPX)


The remainder of the week will be a busy one for the markets on the economic front, but lighter in terms of volume due to the shortened trading week. The U.S. markets will be closed on Friday in celebration of the Fourth of July. Before that, however, are a slew of economic reports beginning with Tuesday's Conference Board Consumer Confidence numbers. These are expected to show some improvement for June, but data on Friday has already shown us that consumers are still very leery to part with their hard-earned cash as unemployment rates close in on 10%. Consumer saving hit a 15-year high of 6.9% in May. Meanwhile, consumer spending was up 0.3% for the first time in 3 months, but shows no drastic improvement in sentiment. On Wednesday the ISM's Manufacturing results will shed further light on the state of the economy. This will be followed on Thursday by the Bureau of Labor Statistics publishing the official estimates for Nonfarm Payrolls.

The Dow Jones Industrial Average ($DJI) rose 90.99 points, or 1.08%, to close at 8,529.38 on Monday. Tuesday will kick off the unofficial start of second quarter earnings season with the release of aluminum maker Alcoa's (AA) earnings. It was the only Dow component to post losses on Monday, falling 2.97%. Hewlett-Packard (HPQ) was the strongest component with a gain of 3.64%, followed by a 3.45% gain in Bank of America (BAC), and a 3.15% gain in Merck (MRK).

The S&P 500 ($SPX) rose 8.33 points, or 0.91%, and closed at 927.23. Crude oil futures were on the rise again from $69.16 a barrel to $71.49 a barrel, but it remains in a congestive zone on the daily time frame that can easily last for several more weeks due to the 200 day simple moving average resistance lingering overhead.

The Nasdaq Composite ($COMPX) rose 5.84 points, or 0.32%, and it closed at 1,844.06 on Monday.

My larger daily outlook continues to be in favor of a larger time frame correction in the making. The pace of the current correction higher off the daily support is enough to allow the markets to attempt a retest of the highs or even a slightly higher high, but this would merely serve to shift the pace of the buying even further and increase the risk for a more rapid price correction on the weekly time frame as opposed to a correction over time with an extended congestion zone.

Forex Outlook:
The GBP/USD pair saw a strong breakout trigger as a buy signal on Monday. This is the most technically sound setup among the currency pairs, but the trend placement is not as ideal as the smaller daily pattern suggest. The larger weekly chart has strong potential to form a cup-with-handle, so I am not expecting as strong of follow-through as the run last month.
The NZD/USD pair also broke higher on Monday. This will be the third leg up on the daily time frame, but the momentum is not likely to be as strong as the previous run into the start of this month.
The USD/JPY is forming a weekly Phoenix™.
The USD/CHF is forming a weekly bear flag, but can easily hold the congestion for another month. It was only a few days ago that China urged the creation of a new international currency, but backtracked off the hard-line on Monday morning and stated that it didn't wish to see any sudden policy changes.

Economic Reports and Earnings Events June 29 - July.

Economic Reports and Events This Week

Monday, June 29, 2009
10:30 a.m. June Dallas Fed Mfg Production Index: Previous: -12.

Tuesday, June 30, 2009
7:45 a.m. ICSC Chain Store Sales Index For June 27
8:55 a.m. Redbook Retail Sales Index For June 27
9:00 a.m. Apr S&P/Case-Shiller Home Price Index: Previous: -18.7%.
9:45 a.m. June Chicago PMI: Previous: 34.9.
10:00 a.m. June Conference Board Consumer Confidence: Previous: 54.9.
5:00 p.m. ABC/Wash Post Consumer Conf For June 27

Wednesday, July 1, 2009
7:00 a.m. Jun 26 Mortgage Refinance Application Survey: Previous: +5.9%.
8:15 a.m. Jun ADP National Employment Report: Previous: -532K.
10:00 a.m. Jun ISM Mfg Index: Previous: 42.8.
10:00 a.m. June Construction Spending: Previous: +0.8%.
10:00 a.m. May Pending Home Sales: Previous: +6.7%.
10:30 a.m. Jun 26 U.S. Energy Dept Oil Inventories

Thursday, July 2, 2009
8:30 a.m. June 27 Weekly Jobless Claims: Previous: 627K.
8:30 a.m. June Non-Farm Payrolls: Previous: -345K.
8:30 a.m. June Unemployment Rate: Previous: 9.4%.
10:00 a.m. June 20 DJ-BTMU Economic Barometer
10:00 a.m. May Factory Orders: Previous: +0.7%.
10:30 a.m. June 19 EIA Natural Gas Inventories
4:30 p.m. June 22 Money Supply

Friday, July 3, 2009
Market Holiday.


Key Earnings Announcements This Week:

Monday, June 29,
Before: -
After: AMED, HRB

Tuesday, June 30, 2009
Before: SCHN
After: EXFO, ZZ, SNX, NCTY (?), VIMC (?)

Wednesday, July 1, 2009
Before: STZ, GIS, LNN, UNF
After: DMAN

Thursday, July 2, 2009
Before: AYI, MEI, MSM
After: SGK (?)

Friday, July 3, 2009
Before: -
After: -

Note: All economic numbers and earnings reports are in line with those compiled by Briefing.com. Occasionally changes will occur that are made after the posting of this column and some companies have not confirmed their time, so always double check when taking positions overnight during earnings season! (?) = Not yet confirmed at the time the list was compiled.

Busy, but Shortened Trading Week Ahead

Today's Commentary:
Note: Current contract month for the futures is now September.

Busy, Shortened Trading Week Ahead

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)

Good day! Last week ended on a very slow note, but this week will prove to be a busy one on the economic front. The week will be a shortened one due to the 4th of July holiday. The 4th falls on a Saturday this year, so the U.S. exchanges will be closed on Friday, July 3rd. The market will pack in most of its news on Tuesday-Thursday, beginning with Tuesday's Conference Board Consumer Confidence numbers. These are expected to show some improvement for June, but data on Friday has already shown us that consumers are still very leery to part with their hard-earned cash as unemployment rates close in on 10%. Consumer saving hit a 15-year high of 6.9% in May. Meanwhile, consumer spending was up 0.3% for the first time in 3 months, but shows no drastic improvement in sentiment. On Wednesday the ISM's Manufacturing results will shed further light on the state of the economy. This will be followed on Thursday by the Bureau of Labor Statistics publishing the official estimates for Nonfarm Payrolls.

Dow Jones Industrial Average ($DJI)


The indices gapped down slightly into Friday's opening bell, but quickly closed the morning gap. In the previous session the indices had rallied sharply in the morning and then fell into a range into the close. The gap lower into Friday merely continued the previous day's range, so the closure of the gap itself simply brought the market back to the upper end of the trading range. This level then served as resistance and the indices pulled back.

The correction off the 15 minute highs began strongly, but the initial rally was still stronger and the pace of the selling slowed as the market came back into its opening levels. Another brief pop followed out of the 10:15 ET correction period, but it was also short-lived. The correction off that high, however, was more gradual than the first and created a two-wave buy setup on the 5 minute time frame shortly after 11:00 am ET.

S&P 500 ($SPX)


Even though the indices did not take off strongly out of the 11:00 ET upside trigger, the market did remain above that low throughout the rest of the day. A Cup-with-Handle on the 5 minute charts followed into noon, but the market had a difficult time finding strong footing to mount a strong intraday trend lasting more than 15 minutes. The S&P 500 and Dow Jones Ind. Ave. tried again out of 14:30 ET and managed to close in on their morning highs, but they fell back into the close. A low-level base then developed in Sunday's session in the index futures, which broke lower into midnight and leaves the indices weak heading into Monday.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) fell 34.01 points, or 0.40%, to close at 8,438.39 on Friday. The Dow ended the week lower by 1.2%. About 2/3 of the index components lost ground on Friday, with American Express (AXP) as the biggest loser. It fell 2.78%. Microsoft (MSFT) was the next biggest loser and fell 1.85%. The strongest index component on Friday was Bank of America (BAC), which rose 3.24%, followed by a 1.62% gain in Merck (MRK).

The S&P 500 ($SPX) fell 1.36 points, or 0.15%, and closed at 918.90. Crude oil futures fell from $70.23 a barrel to $69.16 on Friday, but remains higher by 4.30% so far this month. Gasoline averaged $2.658 nationally on Friday. This was down slightly from the previous day.

The Nasdaq Composite ($COMPX) rose 8.68 points, or 0.47%, and it closed at 1,838.22 on Friday.

Also of interest is that the 10-year Treasury yield fell to 3.51% from 3.55% on Friday. This impacts the current mortgage rates which are now down slightly from an average of 5.5% on a 30-yr fixed rate loan on Thursday to an average of 5.46% on Friday.

Thanks to the rapid decline off June highs, the indices are currently forming what can easily turn into a Head & Shoulders pattern on the 60 minute time frame with the first should beginning in early May. I am continuing to expect this zone of weekly and monthly resistance to hold, so I am treating all buy setups with greater caution that scales up according to the time frames. We can still get good daytrades on the upside, but risk increases as the time frame increases. Buy setups as swing and position trades hold the greatest level of risk in securities that follow the three major indices even though the market is currently reacting to a fairly strong level of daily support. The first half of this week will see the greatest activity, but expect volume to drop off as we head into the three-day weekend. Thursday afternoon will be particularly slow.

Market Holds Daily Support and Rallies Sharply

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)


Good day! The index futures broke sharply higher at midnight after a weak reaction to Wednesday's Fed data. After that initial surge into the start of the new day, however, things were soon heading back the other way. They rolled over at the highs and started a series of downside move into the open. The Labor Department did not help by stating that initial jobless claims rose 15,000 last week to 627,000. Economists had anticipated a drop. Continuing claims also rose by 29,000 last week. In other news, the Commerce Department reported that the gross domestic product contracted at a pace of 5.5% in the first quarter. This is its second revision and was better than the 5.7% that had been expected. Initially the government reported a 6.1% first quarter decline.

Earnings data also had an impact on Thursday. Lennar Corp. (LEN) jumped 17% after posting a larger quarterly loss than expected, but a 63% increase in orders. The news helped boost other housing-related stocks as well. Retailers were also quite happy. Bed Bath & Beyond (BBBY) rose 9.5%. It reported earnings on Wed. after the close. Palm (PALM) shares were trading in a range as it held the 20 day sma, but climbed by almost 14% afterhours Thurs. following earnings that were substantially better-than-expected, albeit still a loss.

Dow Jones Industrial Average ($DJI)


Even though the market did open lower on Thursday, the indices had also formed three waves of selling in the premarket. This exhausted that early morning trend move on the 5 minute time frame and opened the door for a potential reversal into the open. The market didn't seem to need much incentive, however, and began to head higher almost immediately.

I was not convinced heading into Wednesday's close that the market would be able to continue strongly on the upside right away, and thought that it might take until Monday before we saw a decent bounce. Even through the Dow and Nasdaq had hit larger daily support, the S&Ps were still a bit shy, which meant that the previous month's lows still have the potential to draw the market in. It became obvious within the first 30 minutes of the session on Thursday, however, that this was not going to be the case. The upside momentum increased too quickly to allow for any decent short to setup that would take the S&Ps into that stronger test of lows. Instead, the market formed a series of higher highs with bull flag action into the early afternoon.

S&P 500 ($SPX)


The first rally of the day was extreme in the Nasdaq, which left this index more extended than the others, so when a bull flag formed into 11:15 ET, the S&Ps and Dow had the best relative follow-through. This was repeated with another pullback into 5 minute 20 sma support at 13:00 ET. This correction period held well, but the extension on the indices themselves prevented the move from repeating past glory and it had to settle for slightly higher highs. The pace did not really roll over much past that point though. The 5 minute 20 sma broke and the indices attempted to form a 5 minute Avalanche™, but the drop into the base at 14:00 was not quite strong enough and the base was a bit too long to sustain a decent continuation on the downside and the market pulled back higher in the final 25 minutes of trade.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) rose 172.54 points, or 2.08%, to close at 8,472.40 on Thursday.American Express (AXP) led the gains with a rally of 6.59%. It was followed by Alcoa (AA) with a gain of 5%, Merck (MRK) with a gain of 4.4%, and Pfizer (PFE) with a gain of 4.14%. Bank of America (BAC) was the only component to not post a gain, but it was unchanged despite a day in which Fed Chairman Bernanke testified regarding the Bank of America deal to purchase Merrill Lynch last fall. BAC CEO has recently cried foul over the deal, claiming pressure from the government to go through with the purchase. The Fed is now moving to scale back several of the emergency lending programs that were begun this past fall.

The S&P 500 ($SPX) rose 19.32 points, or 2.14%, and closed at 920.26. Crude oil futures rose 2.3% from $68.67 to $70.23 a barrel.

The Nasdaq Composite ($COMPX) rose 37.20 points, or 2.08%, and it closed at 1,829.54 on Thursday.

Despite the gains made on Thursday, I don't see a way for the market to sustain its current uptrend on a daily time frame for much longer. Even if the indices make it back to highs coming off the current daily support, it will be extremely difficult to push strongly past them without a larger weekly correction. The rounded off at highs seems destined to continue over the next several weeks and I am going to remain on the sidelines for the most part in terms of longer time frame investments. I saw an article Thursday morning that Warren Buffett remains unconvinced as well. In his own annual report he has stated that he expects the economy to remain "in shambles this year and probably well beyond." I like his phrasing ("shambles") better than what I had been using, but my sentiment in the longer term remains the same as well. I have done a few short-term holds (1-3 months) since the market hit lows, but I don't have many positions that I am strongly building in stocks for longer term at the moment and am keeping a greater portion in cash than I have in the past decade.

Early Morning Rally Deflates Following FOMC Announcement

Today's Commentary:
Note: Current contract month for the futures is now September.

Early Morning Rally Deflates Following FOMC Announcement -
Rates Unchanged and Likely to Remain So for Quite Some Time

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)
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Good day! Wednesday marked the end of a two-day meeting by the Fed, followed with a policy statement in the afternoon regarding the rate changes. The day began in nearly textbook fashion for a Fed rates day. The indices experienced strength throughout the morning, followed by a slowdown in the afternoon, and then a strong increase on interest following the news.

The market gapped strongly for the third time in the past four sessions following greater-than-expected durable goods orders, which jumped 1.8 in May. It was the third increase in four months. Most Fed days have strength in the morning, but the news certainly helped.

Dow Jones Industrial Average ($DJI)


This time when the market gapped the indices gapped higher after being stuck in congestion throughout the entire afternoon on Tuesday. The Nasdaq Composite had hit its 50 day simple moving average at Tuesday's lows and the S&Ps and Dow were basing along the 15 minute 20 sma after pulling up off the lows. Even though both of these indices still had room before they would test their next major daily support from last month's lows, the market triggered a buy setup with the upside gap.

I have spoken a great deal lately about how to trade these larger opening gaps in the indices. The trigger in Wednesday's session was fairly textbook as well. The market moved higher out of the open, fell into a very short range, and then all three of the indices broke the 15 minute highs at approximately the same time, confirming the setup between the three. Volume also increased coming out of the highs and climbed further when the 10:00 home sales data was released.

The Commerce Department stated that new-home sales for May were at an annual rate of 342,000, down 2,000 from April. Year-over-year sales are down 33% and 55% from two years ago. The supply of new homes for sale also fell. They were at 10.2 months compared to 10.4 months the previous month. Mortgage applications did climb last week from a seven-month lows, but overall things are still looking rather bleak!

S&P 500 ($SPX)


The market apparently agreed. Even through the indices initially climbed following the data, by late morning the pace was slowing. The indices rounded off at highs with a Head-and-Shoulders pattern on the 2 and 5 minute time frames. This triggered into 11:30 am ET, but the upcoming Fed announcement kept volume light. It remained so throughout the market's steady pullback mid-day. The Nasdaq held up fairly well, but the S&Ps and Dow spoke of what was yet to come. When the 2:15 news was released the market had an immediate and negative response.

The Fed left its target for the federal funds rate at 0%-0.25% on Wednesday and its discount rate at 0.5%. The Fed also indicated that it would not be raising rates for quite some time despite speculation that it may begin to do so at some point this fall. Emphasis was placed upon the weak economy versus inflation as the primary concern at present.

The indices fell strongly following the Fed and remained weak into the close, even though they recovered somewhat in the final 45 minutes of trade. The drop took the Dow into its lows from last month as a larger support level, although the S&Ps are not quite there. The bias remains bearish on the daily charts, but the daily support zone can allow the pace to shift now on the smaller 30-60 minute time frames so that we can see a larger price correction up off those lows begin by early next week. The weekly charts are still quite extended, however, so I am not feeling particularly bullish for longer term holds for swing and position trades and will not likely initiate many until we experience a correction off highs on the weekly charts. It is quite likely that the turn off this month's highs will be the kick-off for that move.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) fell 23.05 points, or 0.28%, to close at 8,299.86 on Wednesday.The Dow was again evenly balanced between the winners and the losers on this Fed day with Alcoa (AA) as the top leader. It rose 2.10%, followed by a 1.83% gain in Intel (INTC) and a 1.76% gain in DuPont. The top decliner was Boeing (BA), which fell 5.81%. It was followed by United Technologies (UTX) with a loss of 1.99%, and American Express with a loss of 1.97%.

The S&P 500 ($SPX) rose 5.84 points, or 0.65%, and closed at 900.94. Crude oil futures fell slightly from $69.24 to $68.67 a barrel.

The Nasdaq Composite ($COMPX) rose 27.42 points, or 1.55%, and it closed at 1,792.34 on Wednesday. Tech stocks were helped out thanks to decent guidance from software maker Oracle (ORCL), which rose 7%.

Market Goes Into Holding Pattern Into Fed

Today's Commentary:
Note: Current contract month for the futures is now September.

Market Goes Into Holding Pattern Into Fed

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)

Good day! The market didn't make it very far in Tuesday's session. Wednesday brings with it the conclusion of a two-day FOMC policy meeting and the indices went into a holding pattern throughout most of Tuesday's session with rather choppy trade. The opening action was still pretty decent, however, with stronger 5 minute follow-through.

The index futures held a trading range along lows in afterhours and premarket trade between Monday and Tuesday's regular trading sessions. The range broke lower around 9:00 am ET on Tuesday morning to trigger a strong wave of selling into the opening bell. The market found initial support at the 9:45 ET correction period, but the indices dropped again when the National Association of Realtors reported that existing-home sales were off 3.2% from a year ago. They rose 2.4% in May, but the number was lower than had been expected. This took the three major indices into new lows on the day and took the Nasdaq Composite into its 50 day simple moving average support.

Dow Jones Industrial Average ($DJI)


The selling out of the home data was a lot stronger than average. Despite the extended 60 minute charts on the downside, the market needed to shift the pace in order to create any decent upside potential. The market achieved this by forming a series of slightly lower lows between 10:15 and 11:15 ET. The 11:15 ET correction period held well with the market establishing three lows on a 5 minute time frame with each new low slightly lower than the last. When the channel from this pace change broke higher coming off the third low it created a strong buy setup.

The market moved steadily higher into the level at which the pace began to shift after 10:15 ET. This price resistance hit at the same time at the 15 minute 20 period simple moving averages in the three major indices, and it also corresponded to the 12:00 ET correction period. The market did not correct far, but the market still came back into the 5 minute 20 sma zone. The choppy action then took over. The indices paced themselves higher with slower overall upside than the initial bounce off lows.

S&P 500 ($SPX)


The channel break triggered a small scalp, but the market was unable to shake the choppy action into the closing bell. The indices held their 15 minute 20 period simple moving average zones throughout the afternoon trade and the indices experienced extreme overlap from one bar to the next on that same time frame. This created risk for strong flushes lower on a 5 minute, but the larger 60 minute has been rounding off at lows, so it will be more difficult to sustain larger downside moves even though there is no strong bias for buy setups at the moment either.

I'll be paying attention early on in the day on Wednesday, but things tend to slow down within a few hours on the day of the Fed and this can make trading past 11:00 ET on a Fed day more risky. Volume will drop off even more strongly into the early afternoon. Use extreme caution if you choose to trade at this time and even into the Fed announcement. Action will be volatile out of the news, but movements tend to be strong from a technical standpoint and follow-through well with expectations when patterns develop. The rates are expected to remain unchanged, so more attention will be focused upon the statement that accompanies the announcement for clues on future decision-making.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) fell 16.10 points, or 0.19%, to close at 8,322.91 on Tuesday.The market was split well between gainers and losers. Top gainers in the Dow were Bank of America (BAC) (2.43%), JP Morgan (JPM) (+2.13%) and AT&T (T) (+2.11%). Top losers were Boeing (BA) (-6.36%) and Home Depot (HD) (-1.59%).

The S&P 500 ($SPX) rose 2.06 points, or 0.23%, and closed at 895.10. Crude oil futures closed higher at $69.24 (2.5%) a barrel.

The Nasdaq Composite ($COMPX) fell 1.27 points, or 0.07%, and it closed at 1,764.92 on Tuesday. Apple (APPL) did not perform well. It fell 2.5% and weighed the Nasdaq down.

Market Takes a Plunge

Today's Commentary:
Note: Current contract month for the futures is now September.

Market Takes a Plunge

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)


Good day! There was no sector immune to the selling pressure that hit on Monday after the World Bank reported that the global economy is expected to contract by 2.9% this year. This is a more negative forecast than previously believed. The 60 minute index futures charts triggered a short set coming out of the 2:00 am ET correction period. The setup was an Avalanche™ within a larger Head-and-Shoulders. Support hit at the 5:00 am ET correction period with the completion of an equal move on the S&P 500 futures. A base then formed along the premarket lows to create a continuation short setup coming out of the 8:00 am ET correction period.

Dow Jones Industrial Average ($DJI)


The shifting pace in the premarket further confirmed the pace bias I discussed in yesterday's column, but it was also so strong that it prevented the market from being able to hold the support that had been in play throughout the second half of last week and the market broke the support quickly. This put the market back on the path to be drawn quickly into the 50 day simple moving averages that I spoke of throughout last week as the next major daily support. The weaker S&P 500 and Dow Jones Industrial Average had no trouble reaching this support in the morning trade.

Yesterday I spent some time discussing my favorite gap strategy in the indices. This consists of marking 15 minute highs and lows and taking a position in the direction of that break. In Monday's session the indices were mixed out of the open and the initial attempt by the Nasdaq to break higher went against the bias for the S&Ps and Dow and faced higher risk due to the trend placement and resistance levels. In Tuesday's session none of these cons weighed on the indices. The market gapped against the slower-paced uptrend, effectively triggering a channel break coming off resistance and the three indices all triggered shorts in the direction of the gap at the same time. Resistance was also in place from the previous day's lows in both the Nasdaq and Dow at opening highs and volume increased when the 15 minute lows broke to confirm the trigger.

S&P 500 ($SPX)


The morning selloff continued steadily into 13:30 ET with the 5 minute 20 sma serving as resistance. Even though the indices did not form the most ideal continuation patterns, the larger trigger helped reduce risk on new positions in the direction of the intraday trend using that 5 minute 20 sma zone and previous 5 minute highs as stop zones if broken. The market did attempt to recover somewhat in the mid-afternoon, but even the bounce off 13:30 ET lows was not stronger-than-average, so the pace did not shift enough to create decent reversal patterns. Instead the indices crept higher along the 5 minute 20 sma before breaking the support to flush lower once again in the final 20 minutes of trade. This left the indices closing at the day's lows.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) fell 200.72 points, or 2.35%, to close at 8,339.01 on Monday. The index had ran into price resistance at the year's highs less than two weeks ago and has struggled since. On June 8th of this month former Dow components General Motors (GM) and Citigroup (C) were replaced by Cisco Systems (CSCO) and The Travelers Companies (TRV). Surprisingly, not all of the Dow's index components lost ground. The telecoms finished higher, as did a retailer. Verizon (VZ) climbed 1.1%, while AT&T (T) rose 0.5%, and Wal-Mart Stores (WMT) rose 0.9%. Alcoa (AA) had a tough time, losing 8.91%. The financials were the top losers though. Bank of American (BAC) lost 9.68%, JP Morgan (JPM) fell 6.09%, while American Express (AXP) lost 6.09%.

The S&P 500 ($SPX) fell 28.19 points, or 3.06%, and closed at 893.04. Monday's losses put the S&P 500 back into negative territory for the year. Crude oil futures closed off 3.8% at $66.93 a barrel. It had risen 65% at the year's highs, but has fallen 9% since June 11th. The losses were large in stocks tied to oil. Transocean (RIG) fell 5.9%, while components Chevron (CVX) fell 3.4% and Exxon Mobile (XOM) lost 3.2%. Retail gasoline prices finally broke their 54-day trend in favor of higher prices and the average price of regular unleaded gasoline was $2.69 a gallon today. Other shares amongst the hardest hit on Monday included energy, metals, and the financials.

The Nasdaq Composite ($COMPX) fell 61.28 points, or 3.35%, and it closed at 1,766.19 on Monday.

Tuesday will bring with it the first day of the two-day FOMC meeting with a fed rate announcement to follow on Wednesday. There is still a major economic report to watch out for intraday, however, that can have a strong intraday impact on the market. This is May's existing-home sales data. Monday's descent was substantially above-average in terms of how quickly the market fell in the amount of time it took to do so. This leaves the indices quite extended into Tuesday morning, but it's currently 1:30 ET AM and the pace of the index futures has yet to shift off lows. The downside moves remain stronger than the upside ones even though the market has continued to hold the closing range. We can still see some slightly lower lows, but the pace of the overall selling should shift quite a bit so that even if the market continues to push lower in rapid bursts of selling, the pace of the selling on a 60 minute time frame will slow as compared to Monday morning. Keep an eye on Oracle following Tuesday's close. It will be reporting its fourth-quarter earnings.

Current Dow ($DJI) Components - June 22, 2009

Hey Gang!

I've gotten a few emails recently from traders wanting to know what the current Dow Jones Industrial Average components are due to the recent changes within the indices. Yes, I know, you can run a search to find them, but a number of sites are outdated, so here is the scoop... On June 8th, 2009 General Motors (GM) and Citigroup (C) were replaced by Cisco Systems (CSCO) and The Travelers Companies (TRV). The current components, along with the industry sector they are a part of, are listed below.

All my best,
Toni Hansen
http://www.tonihansen.com


Company (Symbol) Industry
3M (MMM) Diversified industrials
Alcoa (AA) Aluminum
American Express (AXP) Consumer finance
AT&T (T) Telecommunication
Bank of America (BAC) Institutional and retail banking
Boeing (BA) Aerospace & defense
Caterpillar (CAT) Construction and mining equipment
Chevron Corporation (CVX) Oil and gas
Cisco Systems (CSCO) Computer networking
Coca-Cola (KO) Beverages
DuPont (DD) Commodity chemicals
ExxonMobi (XOM) Integrated oil & gas
General Electric (GE) Conglomerate
Hewlett-Packard (HPQ) Diversified computer systems
The Home Depot (HD) Home improvement retailers
Intel (INTC) Semiconductors
IBM (IBM) Computer services
Johnson & Johnson (JNJ) Pharmaceuticals
JPMorgan Chase (JPM) Banking
Kraft Foods (KFT) Food processing
McDonald's (MCD) Restaurants & bars
Merck (MRK) Pharmaceuticals
Microsoft (MSFT) Software
Pfizer (PFE) Pharmaceuticals
Procter & Gamble (PG) Non-durable household products
Travelers (TRV) Insurance
United Technologies Corporation (UTX) Aerospace, heating/cooling, elevators
Verizon Communications (VZ) Telecommunication
Wal-Mart (WMT) Broadline retailers
Walt Disney (DIS) Broadcasting & entertainment

Market Ends the Week Lower

Today's Commentary:
Note: Current contract month for the futures is now September.

Market Ends the Week Lower

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)


Good day! The market wrapped up the week on Friday with a weekly loss for the first time in five weeks. Friday's session alone, however, was mixed. Despite posting strong gains into the opening bell with a large gap higher, only the Nasdaq managed to end the session higher than it began. Volume on the NYSE was approximately 25% above the recent average, but this can easily be attributed to the quarterly rebalancing of the S&P 500 and Nasdaq, as well as quadruple witching with the expiration of stock and index options and index and single stock futures. From a technical standpoint the markets merely maintained the bias of the prior several days and stuck to our expectations for the day.

Dow Jones Industrial Average ($DJI)


After hitting support last Tuesday, the indices have fallen into a low-level range or congestion. They have paced slightly higher since Wednesday, but the overall momentum has been more gradual than the descent, despite some rapid upside moves on the shorter time frames, such as the overnight gap and initial continuation into Friday's opening bell. The Nasdaq did quite well out of the open. It was the only one of the three major indices to break the zone from the 15 minute highs, but since the Dow and S&Ps failed to confirm, we did not see the typical continuation gap strategy many of you have likely seen me discuss in earlier columns.

Essentially, my "larger-than-average index gap strategy" consists of marking the 15 minute highs and lows and initiating a position in the direction the indices break. Risk is always higher if the trigger is in the direction of a trend that has been in play for several days already or if there is immediate and larger time frame resistance that hits within those first 15 minutes. In this case both of these red flags were raised. The S&Ps and Dow had already been trending highs for about two days, while the upper end of the 15 minute trend channel was overhead for resistance, as well as the 20 day sma. In the Nasdaq the 10 day sma was overhead, as was the 15 minute 200 sma, and both hit within the first 15 minutes of the session.

S&P 500 ($SPX)


Even though the market failed to adequately break the 15 minute highs, the indices did not immediately turn in unison to close the morning gap. The S&Ps and Dow flushed lower into 10:15 ET, but they held the 5 minute 20 sma and came back for a second test of the highs, which would have hit stops for those that took the gap closure trigger despite the lack of Nasdaq confirmation based upon their relative weakness. Luckily that did not happen and the fact that the indices merely paced higher at about the same momentum as the 5 minute 20 sma led to a stronger short setup coming off the double top.

Nasdaq Composite ($COMPX)


The Nasdaq still attempted to push to highs again into 11:00 ET, but it lacked any volume confirmation and stopped dead in its tracks when the S&Ps and Dow tested morning highs. These two indices broke the day's lows coming out of the 12:00 ET correction period and a corresponding breakdown on the Nasdaq led to 30 minutes of strong selling before the S&Ps found support with the closure of the opening gap zone and the Nasdaq hit support at the 15 minute 20 sma and opening lows.

Even though the indices tried once again to break lower out of the 14:00 ET correction period, this move was premature compared to the late-morning decline. The correction off support leading into the bear flag lasted only 90 minutes. When compared to the previous downside action, it should have lasted approximately twice that in order to sustain a move similar to the morning drop. Nevertheless, it was still a decent scalp move, lasting about as long as the continuation out of noon before pulling back up off 14:30 ET lows.

The Dow Jones Industrial Average ($DJI) fell 15.87 points, or 0.19%, to close at 8,539.73 on Friday.The index ended the week of 2.9%. On Friday the financials were amongst the strongest in the index. Bank of America (BAC) led with a gain of 2.48%, followed by a gain of 2.43% in JP Morgan (JPM), and a 2.24% rally in American Express (AXP). Microsoft also did well with a gain of 2.43%. Just over half of the index posted losses, however, with the largest in Kraft (KFT) (-1.70%) and Coca-Cola (KO) (-1.49%).

The S&P 500 ($SPX) rose 2.86 points, or 0.31%, and closed at 921.23. The S&Ps ended the week down 2.7%. Friday's losses were concentrated in defensive sectors, such as utilities, telecom, and consumer staples, as well as energy. Crude prices fell 2.6% to end the session at $69.55 a barrel.

The Nasdaq Composite ($COMPX) gained 19.75 points, or 1.09%, and it closed at 1,827.47 on Friday. This amounted to a 1.7% loss for the week. On Friday, however, the tech stocks made strong gains and were up 1.2% overall despite losses in Research In Motion (RIMM) after it posted better-than-expected quarterly earnings and an in-line quarterly forecast after Thursday's close.

In Monday's session we should start to see market players positioning themselves for Wednesday's Federal Reserve announcement at the conclusion of this week's two-day FOMC meeting. We are still deeply entrenched in a recession and the fact that the economy is deteriorating at a slower rate does not mean we are out of the woods. The eyes will be on the Fed in anticipation of not only whether or not rates change, but particularly the wording accompanying the rate news and whether it hints at rate increases before the end of the third quarter.

Current technical action suggests that this zone of daily support will hold into the news, but the overall bias given the pace of recent price action is still more bearish and the 50 day sma remains a magnet. Even if the market does attempt to pull higher this week, I do not expect any strong break of the previous daily highs and such a test would merely serve as an even stronger reversal pattern for selling into at least the end of the summer.

Economic Reports and Earnings Events June 22-26

Economic Reports and Events This Week

Monday, June 22, 2009
No economic events are scheduled for today.

Tuesday, June 23, 2009
7:45 a.m. ICSC Chain Store Sales Index For June 20
8:55 a.m. Redbook Retail Sales Index For June 20
10:00 a.m. May Existing Home Sales: Previous: +2.9%.
10:00 a.m. June Richmond Fed Manufacturing Index: Previous: 4.
5:00 p.m. ABC/Wash Post Consumer Conf For June 20

Wednesday, June 24, 2009
8:30 a.m. May Durable Goods Orders: Previous: +1.9%.
10:00 a.m. May New Home Sales: Previous: +0.3%.

Thursday, June 25, 2009
8:30 a.m. 1Q Final GDP: Previous: -5.7%.
8:30 a.m. Initial Jobless Claims For June 20 Week
2:15 p.m. June FOMC Interest Rate Decision

Friday, June 26, 2009
8:30 a.m. May Personal Income: Previous: +0.5%.
8:30 a.m. May Personal Spending: Previous: -0.1%.
10:00 a.m. DJ-BTMU Business Barometer For June 13
10:00 a.m. End-June Reuters/U Mich Sentiment Index: Previous: 68.7.


Key Earnings Announcements This Week:

Monday, June 22,
Before: CMED (?). WAG (?)
After: SWHC

Tuesday, June 23, 2009
Before: CRMT, CMC, KR, SCS
After: AVAV, APOG, DRI, FUL, JBL, ORCL, SONC, NCTY (?), VIMC (?)

Wednesday, June 24, 2009
Before: AM, MON, RAD
After: COMS (?), BBBY, CKR, MLHR, NKE, PAYX, RHT, XRTX

Thursday, June 25, 2009
Before: AZZ (?), CAG, GRB (?), JTX, LEN (?), MKC
After: ACN, CBK, FINL, MU (?), PALM, RBN, SGK (?), TIBX

Friday, June 26, 2009
Before: KBH


Note: All economic numbers and earnings reports are in line with those compiled by Briefing.com. Occasionally changes will occur that are made after the posting of this column and some companies have not confirmed their time, so always double check when taking positions overnight during earnings season! (?) = Not yet confirmed at the time the list was compiled.

Market Ponders Next Step

Today's Commentary:

Market Ponders Next Step

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)


Good day! The market was split on Thursday amidst the most recent jobless claims and manufacturing data and news from tech leader Research In Motion (RIMM).

Premarket data regarding last weeks jobless claims were mixed. Continuing claims fell by 148,000 to 6.68 million, which is the first time they have fallen in 6 months. On the other hand, the four-week average still rose to 6.75 million. Meanwhile, initial claims were up 3,000 and the four-week average of initial claims fell 7,000 to 615,750. Initial claims had been expected to rise.

In other economic news, the Philadelphia Federal Reserve reported that its regional manufacturing index improved from negative 22.6 in May to negative 2.2 in June. 30% of the firms surveyed in June stated that business was improving, while 35% reported no change and 32% reported worsening conditions. While fairly evenly dispersed amongst these three categories, economists had expected a lesser degree of improvement. The new orders and shipments index improved from negative 25.9 to negative 4.8. Nearly 2/3 of the firms reported that they expected business to improve over the next six months, while only 5% expected it to worsen.

A third major news event for the day came from Research In Motion (RIMM). The BlackBerry maker reported fiscal quarterly earnings of 98 cents a share. This was up from 86 cents a year earlier, as well as 4 cents ahead of estimates. Nevertheless, RIMM still disappointed market participants by issuing a weaker-than-expected guidance and faces fierce competition from Apple (AAPL), which just released its newest iPhone last week.

Dow Jones Industrial Average ($DJI)


The Nasdaq fell sharply out of the open on Thursday for the first 15 minutes of the session on weakness in technology shares such as RIMM. Even though the S&P 500 and Dow Jones Industrial Average also lost ground, the loss was minimal. The larger 60 minute trends were still over-extended on the downside into the open, so this helped the indices curtail losses rather quickly. When the 9:45 ET correction period hit the markets had turned sharply higher. The pace of the buying increased substantially when the 10:00 ET economic data was released, which included the Philly Fed news.

Buying continued into the 10:15 ET correction period with the pace of the upside slowing into that critical time of the day. The S&Ps and Dow both pushed slightly past Wednesday's highs, but the weaker Nasdaq struggled and stalled at price resistance from the previous day's mid-day highs. Given the extent of the morning rally on Thursday, the market needed some time to correct. The rally was strong enough that a mere pullback to the 5 minute 20 sma would not be enough to adequately allow the indices to push to new intraday highs. Had the indices attempted such a move, they would not have likely broken them to any strong degree and would have merely succeeded in shifting the pace of the buying. This would have increased the risk of a strong afternoon reversal.

S&P 500 ($SPX)


Both the S&Ps and Dow did pull back to the 5 minute 20 sma and held it as support. Instead of trying to break the morning highs coming off that support level, however, it held the zone from the 10:15 ET highs as resistance and fell into a longer trading range along that resistance. Notice that the 5 minute 20 sma test also corresponded to the 10:45 ET correction period.

Meanwhile, the weaker Nasdaq pulled back to a larger degree, but all three of the indices experienced a shift in momentum heading into noon and began to create buy setups on the smaller time frames. The Nasdaq formed a reverse head and shoulders pattern on the 5 minute time frame, while the S&Ps and Dow formed three-wave congestive patterns. The three broke higher into the early afternoon with the Nasdaq returning quickly to morning highs and the S&Ps and Dow pushing to new intraday highs. The momentum was not strong enough, nor accompanied by enough of an increase in volume to get very far, but it still offered a nice scalp move.

The remainder of the session proceeded within the day's range and the indices pulled back into the close. All in all, this was a day that in line with the lack of strong 60 minute direction I had noted in yesterday's column and the same remains true going into Friday.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) rose 58.20 points, or 0.69%, to close at 8,555.6 on Thursday. Bank of America (BAC) was the strongest Dow component. It rose 4.88%, followed by a 4.40% gain in JP Morgan (JPM). Included in the handful of losers were Caterpillar Inc. (CAT) with a loss of 2.07% and Intel (INTC) with a loss of 1.67%.

The S&P 500 ($SPX) rose 7.66 points, or 0.84%, and closed at 918.37. Health care, consumer staples, and utilities led the gainers in Thursday's trade, while the market's underachievers were led by information technology. Crude oil futures rose slightly from $71.03 to $71.37 a barrel.

The Nasdaq Composite ($COMPX) fell 0.34 point, or 0.02%, and it closed at 1,807.7 on Thursday.

Market Stalls but Remains Weak

Market Stalls but Remains Weak

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)


Good day! On Wednesday the market continued to push the downtrend that has been in play since the indices triggered a momentum reversal short heading into the week. The trend persisted into the 10:45 ET correction period on Wednesday morning, but as I mentioned yesterday, the intraday trend was already becoming extended into Tuesday's close, so the move did not get far.

Downside was primarily led by the S&P 500 and Dow Jones Industrial Average, while the Nasdaq Composite once again displayed a great deal of relative strength. Early morning data with crude oil inventories accounted for the last flush on the downside at 10:30 ET. Oil supplies fell further than expected last week, while gasoline supplies increased. Earlier in the morning a report on consumer prices showed a smaller-than-expected increase. The Philadelphia region manufacturing survey and weekly jobless claims will be coming out on Thursday.

Dow Jones Industrial Average ($DJI)


When the 10:45 ET correction period hit in the indices, the market pivoted strongly. This was a third low for the Nasdaq on a 5 minute time frame whereby each low was only slightly lower than the previous one. This created a momentum reversal buy setup that was just the opposite of the larger 60 minute time frame short that triggered on Monday. It also confirmed the role of the Nasdaq as the upside leader on Wednesday. The channel made by the momentum shift broke higher out of the 11:15 ET correction period to confirm the intraday reversal. The S&Ps and Dow broke 5 minute 20 sma resistance at the same time.

Buying continued quickly in the market until 15 minute 20 sma resistance hit in the S&Ps and Dow and the 5 minute 200 sma hit on the Nasdaq. The indices then fell into a trading range with a slight pullback into noon to form a 5 minute bull flag that broke higher with another pivot taking place off resistance at 12:30 ET. Another congestive correction followed, triggering a slightly larger bull flag out of the 13:00 ET correction period and into 13:30 ET. The result was a strong push back into Tuesday's highs in the Nasdaq and Tuesday's closing highs in the Dow. The Dow and S&Ps also both hit strong 5 minute 200 sma resistance and this spelled the end of the session's recovery attempt.

S&P 500 ($SPX)


The afternoon advance was led by health care, consumer discretionary, and information technology shares. The laggards included energy, financials, and materials. After 14:00, however, even the stronger Nasdaq succumbed to the selling pressure once again and trended steadily lower on the 5 minute time frame into the closing bell. An Avalanche™ at 14:30 ET triggered and broke the 5 minute 20 sma support zone that had held throughout the rally and after that point it became resistance that held into the close.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) fell 7.49 points, or 0.09%, to close at 8,497.18 on Wednesday. The index itself was fairly evenly split between the winners and the losers. On the positive side were Pfizer (PFE) with a gain of 2.97%, Home Depot (HD) which was up 1.94%, and Intel (INTC) up 1.77%. Leading the downside were General Electric (GE) with a loss of 4.15%, Alcoa (AA) with a loss of 3.76%, and then the financials of the group starting with Bank of America (BAC) with a loss of 3.38%.

The S&P 500 ($SPX) fell 1.26 points, or 0.14%, and closed at 910.71. Crude oil futures fell to $69 a barrel earlier in the session, but recovered to close high by $0.56 at $71.03.

The Nasdaq Composite ($COMPX) gained 11.88 points, or 0.66%, and it closed at 1,808.06 on Wednesday.

The market doesn't have a strong directional bias on the 60 minute time frame heading into Thursday. The indices are all still extended on that time frame and at some support, but the larger support on the daily charts that will continue to act as a magnet is the 50 day sma. This interplay will most likely create some more choppy trading into the weekend with less follow through on new daily triggers.

Market Continues to Push Lower

Today's Commentary:

Market Continues to Push Lower

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)


Good day!

Tuesday's economic data revealed that housing starts jumped 17.2% in May according to the Commerce Department. They had fallen 12.9% the previous month and had been expected to rise by 5.9%. A strong portion of the gains were attributed to the construction of new apartment complexes, while starts on single-family homes rose 7.5%. Meanwhile, wholesale prices increased 0.2% in May compared to an anticipated gain of 0.6%. The Labor Department further reported that the core PPI, which excludes food and energy prices, fell 0.1%. May's consumer-price index and the weekly petroleum inventories will be released on Wednesday, followed by the Philadelphia region manufacturing survey and weekly jobless claims on Thursday.

Dow Jones Industrial Average ($DJI)


Interestingly, Tuesday's data did not have much of an impact on the day's trade... At least in terms of immediate impact! The indices continued the range that had been in place since mid-morning on Monday to finally correct long enough to allow the market to continue the downtrend. This was accomplished by resting in the range for an amount of time comparable to the previous intraday correction at lows on Friday.

The pace shifted early on Tuesday morning within the range itself. After hitting highs early on, the market pulled quickly lower for several minutes and then retested the zone of the morning highs while hugging the 5 minute 20 period simple moving average from the 10:15 ET correction period into the 11:15 ET correction period. Volume was very light on this second push to intraday highs, which confirmed that the bulls were not particularly eager to jump on board as the indices approached resistance levels on the 15 minute time frame and the Nasdaq futures inched into their 200 sma on the 5 minute time frame.

S&P 500 ($SPX)


When the market turned lower late Tuesday morning it didn't do so with the same gusto as the previous day initially. It did, however, build strength on the downside once it cleared the support from the morning lows. That zone had been tested overall at noon and broke sharply coming out of 12:30 ET. This full-filled the third waves of selling in the S&Ps and Dow on the 30 minute time frame downtrends.

13:00 ET is a strong correction period in the market and I expected this support zone to hold, but the pace of the selling did not slow or shift enough to allow for a sharp bounce to take place. A small reaction to the support took the indices into 5 minute 20 sma resistance, but the move was simply not rapid enough to form a decent Phoenix™. Instead, two smaller waves of selling took the indices to slightly lower lows into 14:30 ET while overall hugging the 5 minute 20 sma. This did result in the smaller time frame resistance breaking, but the lack of an adequate shift in momentum prevented the market from following through strongly and kept risk higher into the close. The 15 minute 20 sma held as resistance and the market pulled back again into the close, but still held the zone of the intraday support into midnight.

The next major daily support is not until the 50 day sma in the indices. Although we will likely see a slowdown compared to the week so far, that zone is now serving as a magnet. I won't be as aggressive on the short side for new positions as compared to over the past two trading days, however, due to the greater extension of the intraday trend.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) fell 107 points, or 1.3%, to close at 8,505 on Tuesday. Only two of the Dow's 30 index components posted gains and these were again only by a fraction of a point. They included Pfizer (PFE) and Microsoft (MSFT). Bank of America (BAC) dropped 4.5%. Disney (DIS) fell 3.13%, while General Electric (GE) lost 2.81%, and Alcoa (AA) shed 2.77%. The index has fallen 3.4% so far this week after briefly pushing into positive territory for the year on Friday. Of course, this was a very major resistance level and the indices are also testing other levels of resistance on the weekly time frames such as the 200 day moving average. The thing to keep in mind is that even when prices trade above these resistance zones, the exact price is not the actual resistance. There is a cushion around that level that marks the resistance zone, so even when a security or index pierces support or resistance, it does not necessarily mean it will break it.

The S&P 500 ($SPX) fell 12 points, or 1.3%, and closed at 912. Electronics retailer Best Buy (BBY) failed to live up to expectations and posted disappointing same-store sales data. This seemed to have an impact on the retail sector overall. Target (TGT) fell 3.7%, but Nordstrom (JWN) had a particularly tough session with a loss of 6.8%. Wal-Mart (WMT) did not follow suit and only slipped 0.4%.

The Nasdaq Composite ($COMPX) fell 20 points, or 1.1%, and it closed at 1,796 on Tuesday.

Momentum Reversal Flushes Markets Lower

IMPORTANT UPDATE: I want to thank everyone that attended my webinar on Developing a Universal Trading System. Due to its popularity, I decided to offer it a second time on June 16th. Well, within 48 hours that one was also full! Don't worry though, I will be holding a number of such classes over the next several months. In fact, I will be teaching a class for the CME Group in just a couple of weeks. Ongoing education is extremely important in this profession and since my webinars fill up rather quickly, I'll be sending out registration links to those of you that have worked with me in an educational capacity whether through my courses or mentoring 24 hours before opening it up to the general public, so keep an eye out for it! I will also be sharing an updated version of the class on how to develop a universal trading system at November's Online Trading Expo, so I hope you can make it! It will be fun!!! I'll let you know the details as soon as possible!

Today's Commentary:

Momentum Reversal Flushes Markets Lower

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)



Good day! In yesterday's column I looked at the momentum reversal pattern that was forming on the 60 minute and daily time frames heading into this week. This was created when the market jumped higher into the start of the month and then shifted momentum as it made slightly higher highs over the course of nearly two weeks. The pace was then slower on the upside in Friday's session on light volume. This shift in the pace of the buying created the potential for sharp downside flushes with the 20 day simple period moving average serving as our first major support level, just as it had in April when a similar pattern had also developed.

Dow Jones Industrial Average ($DJI)


The market triggered the most recent momentum reversal short pattern immediately out of the open on Monday morning when the indices gapped sharply lower into the bell. The initial premarket trigger took place coming out of the 2:00 am ET correction period, however, when the index futures, which had been trading in a range on the all sessions time frame since 16:15 ET on Thursday, broke down. The move continued out of a smaller premarket base at low that formed between 4:00 am ET and 9:30 am ET Monday morning and the selling continued until the index futures struck that first major daily support at the 20 day sma.

Following the open, the indices stepped quickly lower. That 20 day sma support hit when the market broke down out of its strongest intraday move into 10:30 am ET after a light volume base along early morning lows. By the time that daily support hit the indices were faced with their worst losses in at least a month. The support, however, did not merely hit on the daily time frame. The indices also struck intraday support by established an equal move as compared to the selloff from last Thursday into last Friday morning's lows. This had hit earlier on the Dow, but both the S&P 500 and Nasdaq 100 futures contracts came into this same type of support when the daily charts hit the 20 day sma.

S&P 500 ($SPX)


This mix of morning support levels made it extremely difficult for the market to get in much additional movement throughout the remainder of the session, although support and resistance levels still held extremely well and offered a number of scalping opportunities. One example was the indices' returned to intraday lows after striking 15 minute 20 sma resistance at 14:30 ET. It had taken nearly the entire session on Friday to correct from the selling into Friday morning, however, so the congestion following 10:30 ET on Monday was not quite long enough to allow for a third push lower. The daily support is also quite strong and a previous attempt at a similar move in mid-April failed to break comparable support. The indices are move extended now, however, and at stronger weekly resistance, so I believe that the odds are higher for this support zone to break. This would place the next support level at the 50 day simple moving averages in the indices.

Nasdaq Composite ($COMPX)


The Dow Jones Industrial Average ($DJI) fell 187.13 points, or 2.13%, to close at 8,612.13 on Monday. Only Microsoft (MSFT) and American Express (AXP) posted gains in this index, albeit only by a fraction of a percent. Top losers included Alcoa (AA) with a loss of 6.51%, DuPont (DD) with a loss of 4.48%, and Merck (MRK) with a loss of 4.29%.

The S&P 500 ($SPX) fell 22.49 points, or 2.38%, and closed at 923.72. A mere 22 of the S&P 500's index components ended the day in positive territory. Crude oil closed lower by 2% at $70.62 a barrel in New York, while gold fell $13.20 an ounce to $927.50.

The Nasdaq Composite ($COMPX) fell 42.42 points, or 2.28%, and it closed at 1,816.38 on Monday.

Monday's economic data revealed a huge disappointment in the Empire State's manufacturing index which fell to negative 9.4 in June after a reading of negative 4.6 in May. This was quite far from economists' expectations of a reading of negative 3. Anything under 0 indices contraction. Tuesday's economic data includes current housing starts, along with May's producer prices and industrial production data. May's consumer-price index and the weekly petroleum inventories will be released on Wednesday, followed by the Philadelphia region manufacturing survey and weekly jobless claims on Thursday.

Summer Slowdown Kicks In

IMPORTANT UPDATE: I want to thank everyone that attended my webinar on Developing a Universal Trading System. Due to its popularity, I decided to offer it a second time on June 16th. Well, within 48 hours that one was also full! Don't worry though, I will be holding a number of such classes over the next several months. In fact, I will be teaching a class for the CME Group in just a couple of weeks. Ongoing education is extremely important in this profession and since my webinars fill up rather quickly, I'll be sending out registration links to those of you that have worked with me in an educational capacity whether through my courses or mentoring 24 hours before opening it up to the general public, so keep an eye out for it! I will also be sharing an updated version of the class on how to develop a universal trading system at November's Online Trading Expo, so I hope you can make it! It will be fun!!! I'll let you know the details as soon as possible!

Today's Commentary:

Summer Slowdown Sets In

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)



Good day! After nearly two weeks away from the markets, I came back this weekend to discover that the indices are in approximately the same place (give or take a few points) as when I left! As I was heading out on an extended road trip earlier this month the indices were running into strong resistance zones on the weekly time frame and extended on the 60-minute time frame. This limited the potential for strong continued upside and the market indeed had difficulty pressing through that zone. Even though the market has managed slightly higher highs over the past two weeks, each high only pushed the limits of the previous one without clearing the general resistance zone.

Dow Jones Industrial Average ($DJI)


The slightly higher highs on the 60 minute charts and daily time frame has shifted the overall momentum on the upside since late last month and has created a potential momentum reversal pattern on these same time frames. The volume has also been light as we head into summer trading and many, like myself, have taken some time off to ease the transition. This leaves the market vulnerable for rapid flushes on the downside this week, as well as at risk for a larger price correction.

We did see similar action take place at the start of April, however, without the indices able to break the 20 day sma support. That will again be the first major support level for flushes on the downside on the 60 minute time frame. The middle of last month's trading range and the 50 day sma will be the next major support if the pace can shift well enough to break that 20 day sma.

S&P 500 ($SPX)


The Dow Jones Industrial Average ($DJI) rose 28.34 points, or 0.32%, to close at 8,799.26 on Friday. The index ended the week higher by 0.4% and is currently up 0.3% for the year. Pulling ahead compared to the other financials, Bank of America (BAC) posted gains of 5.78% on Friday after breaking out of a trading range earlier in the week. Microsoft (MSFT), which was trading on substantially less than its average daily volume after breaking out of a range three weeks ago, came in second with a gain of 2.19%. None of the Dow's components posted strong losses. The largest decliner on Friday was Alcoa Inc. (AA) which fell 1.88%, but was still up strongly on the week overall.

The S&P 500 ($SPX) rose 1.32 points, or 0.14%, and closed at 946.21. It ended the week higher by 0.7% and is up 4.8% on the year-to-date.

The Nasdaq Composite ($COMPX) fell 3.57 points, or 0.19%, and it closed at 1,858.80 on Friday. The Nasdaq was up 0.5% for the week and up 18% for the year. This has been the strongest index since bottoming out in March and it's up 42% since the lows made a mere couple of months ago.

Nasdaq Composite ($COMPX)


Economic data worth paying attention to early this week will be Monday's Empire State manufacturing survey for the New York region and the National Association of Home Builders housing index. Tuesday will bring further housing data with current housing starts, along with May's producer prices and industrial production data. May's consumer-price index and the weekly petroleum inventories will be released on Wednesday, followed by the Philadelphia region manufacturing survey and weekly jobless claims on Thursday.

Economic Reports and Earnings Events This Week

Economic Reports and Events This Week

Monday, June 15, 2009
8:30 a.m. June Empire State Fed Manufacturing Survey: Expected: -3. Previous: -4.55.
9:00 a.m. Apr Tsy International Capital: Previous: +$36.9B.
1:00 p.m. Apr NAHB Housing Index: Previous: 16.

Tuesday, June 16, 2009
7:45 a.m. ICSC Chain Store Sales Index For June 13: Previous: +0.2%.
8:30 a.m. May Housing Starts: Expected: +4.8%. Previous: -12.8%.
8:55 a.m. Redbook Retail Sales Index For June 13: Previous: -4.3%.
8:30 a.m. May Producer Price Index: Expected: +0.6%. Previous: +0.3%.
8:30 a.m. May Producer Price Index,ex-food & energy: Expected: +0.1%. Previous: +0.1%.
9:15 a.m. May Industrial Production: Expected: -1.1%. Previous: -0.5%.
9:15 a.m. May Capacity Utiliztion: Expected: 68.3%. Previous: 69.1%.
4:30 p.m. June 1 API Oil Industry Report
5:00 p.m. ABC/Wash Post Consumer Conf For June 13: Previous: -47.

Wednesday, June 17, 2009
7:00 a.m. June 1 Mortgage Refinance Applications: Previous: -11.8%.
8:30 a.m. May Consumer Price Index: Expected: 0.3%. Previous: 0%.
8:30 p.m. May Consumer Price Index, ex-food energy: Expected: +0.1%. Previous: +0.3%.
8:30 a.m. 1Q Current Account: Expected: -$85.0B. Previous: -$132.8B.
4:30 p.m. U.S. Energy Dept Oil Inventories

Thursday, June 18, 2009
8:30 a.m. Initial Jobless Claims For June 13 Week: Expected: +9K. Previous: -24K.
10:00 a.m. June Philadelphia Fed Business Index: Expected: -18. Previous: -22.6.
10:00 a.m. May Conference Board Leading Indicators: Expected: +1%. Previous: +1%.
10:00 a.m. DJ-BTMU Business Barometer For June 6: Previous: unch.
10:30 a.m. June 5 EIA Natural Gas Inventories

Friday, June 19, 2009
No economic events are scheduled for today.



Key Earnings Announcements This Week:

Monday, June 15,
After: CASY, LZB

Tuesday, June 16, 2009
Before: BBY, FDS, SFD
After: ADBE, NCTY (?), VIMC (?)

Wednesday, June 17, 2009
Before: ATU, FDX, SMTS
After: CLC, IHS

Thursday, June 18, 2009
Before: CCL, CMED (?), DFS, GRB (?), SJM, PRGS, WGO
After: FMCN (?), HWAY (?), RIMM

Friday, June 19, 2009
Before: KMX


Note: All economic numbers and earnings reports are in line with those compiled by Briefing.com. Occasionally changes will occur that are made after the posting of this column and some companies have not confirmed their time, so always double check when taking positions overnight during earnings season! (?) = Not yet confirmed at the time the list was compiled.

Excellent Technical Day in the Indices as Dow Tests Yearly Highs

IMPORTANT UPDATE: I want to thank everyone that attended my webinar last week titled Developing a Universal Trading System. Due to its popularity, I decided to offer it a second time on June 16th. Well, within 48 hours that one was also full! Don't worry though, I will be holding a number of such classes over the next several months. In fact, I will be teaching a class for the CME Group in just a couple of weeks. I will send out the registration link to those of you who follow me on a daily basis first before opening it up to the general public, so keep an eye out for it! I will also be sharing an updated version of the class on how to develop a universal trading system at November's Online Trading Expo, so I hope you can make it! It will be fun!!! I'll let you know the details as soon as possible!

Today's Commentary:

Excellent Technical Day in the Indices as Dow Tests Yearly Highs

(Note: Unless otherwise stated, the index action described below relates to the EMini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.)



Good day! After breaking free from their daily trading range on Friday afternoon, the indices continued to climb sharply into Monday morning and all 10 of the S&P 500's industry groups posted gains. The rally was accompanied by news of General Motor's (GM) bankruptcy filing, which is the third largest in U.S. history. That run, however, took the indices into the larger daily resistance levels we have been keeping an eye on over the past several weeks with the Dow Jones Industrial Average testing the year's highs. This resistance zone not only kept further buying in check after the larger-than-average intraday run on Monday, but it kept them at bay on Tuesday as well. This was despite positive housing data that led to a sharp, albeit brief, morning rally.

Dow Jones Industrial Average ($DJI)


Pending home sales rose for the third month in a row, beating expectations, and the market took off. Like most sprinters, however, the move was short-lived. The upper resistance held and the indices turned off highs at a faster-than-average pace, pulling back into support at the 5 minute 20 sma zone. By forming a slower bounce off this support, the indices created a 5 minute Avalanche™ short setup that triggered with the 10:45 ET correction period. The new intraday downtrend continued with a bear flag on the same time frame going into 11:30 ET.

Over noon the intraday pace began to shift. The 5 minute 20 period simple moving average served as resistance, leading to one more push lower out of 12:00 ET, but the pace was more gradual than during the previous bear flag. The