Volume was somewhat lighter on Thursday as the market continued to correct off Wednesday's morning highs. After pulling lower out of the open into the previous day's lows, the market bounced into the 5-minute 20 simple moving average and promptly fell into a trading range which should last well into the afternoon. While the range made it a decent day if a trader simply focused on trading pivots, things were a bit more difficult for those searching out some decent momentum.

I only traded three stock positions on Wednesday. I managed to catch Alexandria Real Estate (ARE) for a rapid daytrade breakdown in the morning, along with another scalp, this time on the upside in JA Solar Holdings (JASO). The third one, however, in Monolithic Pwer Sys Inc. (MPWR) was by far the best of the bunch and it trended highs throughout the afternoon. Other notable gains on Thursday included Cree Inc. (CREE) once again, E Future Information Tech Inc. (EFUT), Sigma Designs Inc. (SIGM), and Barrick Gold (ABX).



Over noon the momentum in Thursday's session began to turn over. The upside slowed with lighter volume and at 13:00 ET the market could not even take back all the losses from the decline into 12:30 ET. The strongest downside began soon after af the 14:00 ET reversal period and led to a rapid return to the morning lows in the Nasdaq Composite and a closure of the previous day's gap in the Dow Jones. Ind. Ave. The support levels hit at 15:00 ET and the market moved somewhat higher throughout most of the remainder of the day until hitting the 15-minute 20 sma resistance and pulling slightly lower again into the close.



By the end of the session on Thursday the Dow ($DJI) had fallen 48.86 points (-0.4%). It closed at 13,766.7. 20 of its 30 components lost ground on the day. One of the hardest hit was Home Depot Inc. (HD). It lost 2.4% by the end of the session. The S&P 500 ($SPX) shed 10.28 points (-0.7%). It closed at 1,518.75. The Nasdaq Composite ($COMPX) lost 12.19 points (-0.5%). It closed at 2,654.29.



My outlook into Friday is now favoring a hold of the 60-minute range since the market did not attempt to move higher on Thursday, but there is still room to push for a better test of the daily highs. I don't think, however, that at this point the market will be able to do this before the week is over. I am leaning for a continuation of the somewhat more difficult trading of the last two days instead.

Toni Hansen is President and Co-founder of the Bastiat Group, Inc., and runs the popular Trading From Main Street. She can be reached at Toni@tradingfrommainstreet.com.