Good day! I hope you had a wonderful three day weekend! The market fell asleep a bit early last week, making for a slow Friday's worth of trading. The selling we saw hit earlier in the week continued as expected, but without offering much for decent intraday setups. The morning was the most active with a pretty flat open. The SP500 and Dow were a bit weaker than the NASDAQ and found new lows while the NASDAQ hit support at the prior afternoon's lows. This hit with the 9:45 ET reversal period, helping lead to a bounce into highs from Thursday's close and the SP500 and Dow's 5 minute 20 sma resistance.

The early morning trading range continued for another hour as the market came back into prior lows and price support, leading to another, albeit weaker, move into intraday resistance. This time the move was more subtle, with a lot of overlap, leading to a narrowing of the range and a nice triangle as volume declined. The triangle broke into 11:30 ET, creating new intraday lows over noon.

The market pivoted much more strongly than I was expecting given the pace of the descent. Since the rally was strong, it meant that the odds were greater for a continuation of a trading range into the afternoon. Essentially, this is what we got as volume fell and the market held prior highs. The Dow Jones Industrial Average tried the hardest to move higher into the afternoon, forming a sloppy Reverse Head & Shoulders, but the SP500 and particularly the NASDAQ were unable to break early morning resistance levels.

Heading into the shortened trading week, I think that we will continue to see corrective action coming off last week's highs. The 60 minute 20 sma is the next immediate resistance in the SP500 and Dow Jones Industrial Average for intraday resistance coming off Friday lows within this correction. Overall it's looking like action is going to remain choppy because while the daily charts look lower, the intraday ones are not yet forming great short setups because of the large divergence between the SP500 and Dow on one hand and the NASDAQ on the other. Risk on swing trades remains higher, but here are a few I'll be watching this week: THQI short and AFFX, AN and CVD long.

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.