After a choppy session on Tuesday, the market remained in a range for much of yesterday as well. Without a strong intraday pattern forming on the larger 15-60 minute charts, the market didn't get very far out of the open. The day began close to where the other ended and crept higher for the first 15 minutes to fill the NASDAQ and SP500 gap from the prior day. This hit at the same time as the 15 minute 200 sma in these two indices and pushed them into a correction that was propelled by the release of the Chicago PMI at 49.2%. This showed a significant slowdown in economic growth and was a break in the 50% mark for the first time in 27 months.

The selling was swift, but relatively short-lived. Once the Dow Jones Ind. Ave. hit the support from the prior day's lows and the NASDAQ came into 15 minute 20 sma support, the market corrected. The reversal ultimately led to a retest of morning highs after an 11:00 ET continuation pattern on the upside. The morning hit once again just before 11:30 ET and the market rounded off to pull more gradually into support. The Dow then fell into a range along the support from the 15 minute 20 sma, while the NASDAQ retested the lows of the day.

The Dow had initially began to form a bearish pattern as volume declined and the market hugged the support, but the slower downside pace in the NASDAQ ultimately won. The market pivoted back up off the support with the onset of the 13:00 ET reversal period, broke through the 5 minute 20 sma resistance and slid back into their third test of highs intraday.

Following this second correction from 15 minute support, the market became very choppy. While holding up well and suggesting more of an upside bias, the move leading into the breakout at 15:00 ET was quite whippy. We saw some small triangle action into 14:30 ET on the 1-2 minute charts and this is what ultimately helped to reverse the pace in the range on the smaller time frames to favor an upside resolution to the range. This move lasted for more than a typical breakout on the 5 minute charts and put in an equal move as compared to Tuesday's afternoon rally before the end of the day. Ultimately the indices closed right near the day's highs.

Following such a rapid late day rally, we will likely see some initial highs hold on Thursday in the first hour of the day unless the market gaps lower. The rounded lows on the 15-30 minute charts, however, suggest that the market holds this week's lows in Thursday's session. This week has been a nice one for strong follow through on intraday and swingtrade setup so far, but we'll be heading into a three day weekend soon and are likely to see that start to change.

Updates: AMT from last Monday has support at its 20 day sma. WLP broke higher on Tuesday out of the daily triangle and has support under Monday's lows. HSP, which I've been following for a few weeks and has had several strong days is testing the upper end of it's weekly range for upside breakout potential. I am watching CHRS as well, but would have preferred the MET to have triggered already so will consider a setup on it higher risk at this point.

Economic Reports and Events
Sep. 01: Initial Claims 08/27 (8:30 am), Personal Income for Jul. (8:30 am), Personal Spending for Jul. (8:30 am), Construction Spending for Jul. (10:00 am), ISM Index for Aug. (10:00 am), Auto Sales for Aug. (12:00 am ), Truck Sales for Aug. (12:00 am)
Sep. 02: Average Workweek for Aug. (8:30 am), Hourly Earnings for Aug. (8:30 am), Nonfarm Payrolls for Aug. (8:30 am), Unemployment Rate for Aug. (8:30 am)

Earnings Announcements of Interest
Only stocks with an average daily volume of 500K+ are listed. List may not be complete so be sure to always check your stocks' earnings dates before holding a position overnight. (A) = Earnings after the close, (B) = Earnings before the open, (?) = Earnings time not specified at the time of this writing
Sep. 01: CIEN (B), COCO (B), FNSR (A), HRB (A)
Sep. 02: -
Sep. 05: -

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.