Good morning! After a very steep decline earlier in the week, the market took a break on Friday, correcting from a 2 1/2 day decline. Beginning in the early afternoon on the 4th, this was nearly a textbook intraday trend move, putting in three waves of selling on the 60 minute charts as the market held the 15 minute 20 sma throughout the move. Volume spiked on Thursday, indicating exhaustion on that time frame. The Commodity Channel Index also became oversold on the daily charts as this overbought/oversold oscillator came back into prior pivot lows.

I was out of the office most of the day on Friday, but definitely did not miss a lot!. The day was right in line with our expectations. While we saw the greater correction to the selling on the larger intraday time frames, the market was very choppy with a lot of overlap throughout the session. The risk continued to rise as the range that was established in the morning narrowed on weak volume going into the close.

The most action (if you can call it that) took place out of the open when the market gapped higher and cleared the 15 minute 20 sma in the SP500 and Dow Jones Ind. Ave. The gap was relatively minor, however, and as soon as the 9:45 ET reversal period hit it began to fill. The morning and mid-day reversal periods held particularly well until 13:00 ET, and the market pivoted within the range at these zones, shown on the 5 minute charts of the NASDAQ and Dow. These pivots off support and resistance were the only strong technical patterns that the market saw on Friday. Breakouts and flag moves came with so much overlap in the range that they lacked strong risk to reward ratios even though a few took place within the range.

I am not that excited heading into this week. The daily charts can still try to sell off more, favoring a larger weekly and monthly reversal, or we can fall into a more typical correction to the steep selloff with a range into the 20 day sma zone. I can see either scenario playing out given the current market. Since we are at a crossroad here, I'm going to have to wait things out and stick to the shorter time frames for now. As a result, there isn't a lot out there that I am looking to add for swing and position trades at this time as we head into Columbus Day and the very beginning of earnings season.

Updates: Position trades: HSP has support at the lows of the weekly bases. I am looking at acquiring NTRS as a position trade buy. It has bounced off the 20 week sma and now needs a daily setup to form. HCA as a position trade short from 9/20 hit trailing stops for a swing, but a larger position trade target is in the $43 zone.

Economic Reports and Events
Oct. 10: -
Oct. 11: FOMC Minutes (2:00pm)
Oct. 12: Crude Inventories 10/7 (10:30 am)
Oct. 13: Export Prices ex-ag. for Sep (8:30 am), Import Prices ex-oil for Sep (8:30 am), Initial Claims 10/08 (8:30 am), Trade Balance for Aug (8:30 am), Treasury Budget for Sep (2:00 pm)
Oct. 14: Core CPI for Sep (8:30 am), CPI for Sep (8:30 am), Retail Sales for Sep (8:30 am), Retail sales ex-auto for Sep (8:30 am), Capacity Utilization for Sp (9:15 am), Industrial Production for Sep (9:15 am), Mich Sentiment-Prel for Oct. (9:45 am), Business Inventories for Aug (10:00 am)
Oct. 17: NY Empire State Index for Oct. (8:30 am)
Oct. 18: Core PPI for Sep (8:30 am) PPI for Sep (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
Oct. 10: AA (A), DNA (A), NGAS (?), PKX (B)
Oct. 11: AAPL (5:00 pm ET), GCI (B), LPL (?)
Oct. 12: APOL (B), ASML (02:00 am ET), ENTG (B), FAST (B), HDI (B), HMT (B), LRCX (?), MTG (B), MON (B), SOSA (07:00 am ET)
Oct. 13: FCS (B), BPOP (A), TRB (B), WGO (B)
Oct. 14: BBT (B), FDC (?), GE (08:30 AM et), MI (B), NGAS (?), RF (B), UNH (B)
Oct. 17: AEP (?), C (B), CCK (A), ETN (B), FHN (B), GM (08:00 am ET), HAS (B), LSS (A), MDC (A), MAT (B), NVLS (A), OMM (A), RMBS (?), PHG (?), SVU (B), TMA (A), WB (B)
Oct. 18: MMM (B), ADTN (B), ASD (B), ASO (B), BSX (B), BCR (A), CNI (?), CDWC (?), CHB (A), CYMI (?), FITB (B), FRX (B), FCX (?), GENZ (B), GILD (A), GAP (?), INTC (?), JNJ (B), KEY (?), KFT (A), LLTC (A), MEL (?), MOT (A), NCC (B), NVS (?), PH (B), RYL (A), SAFC (07:45 am ET), STX (A), SOV (A), STT (?), STN (?), SYK (A), STI (B), TER (A), CAKE (A), USB (?), UTX (B), WFC (B), YHOO (?)

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.