Good morning! After last week's dramatic decline, the market continued the choppy action we saw on Friday, but with a slight continuation of the downside bias that had remained into the end of last week. This started with a pretty flat open, followed by a breakdown from Friday's range. This selling progressed for about the first 45 minute of the day until the NASDAQ formed a small 2B on the 2 minute charts and the SP500 and Dow Jones Ind. Ave. also slowed and rounded off to pull higher off the 10:15 ET reversal zone.

The NASDAQ showed the most relative strength by picking up pace as it went into the morning highs, which was also the middle of Friday's range and the 15 minute 20 sma resistance intraday in the SP500.  It was not a smooth move in the overall market though. The indices had a great deal of overlap and that was true of the pullback off the resistance as well when the indices retraced more than halfway back to lows.

The market pivoted back into the upper end of the range out of the 12:00 ET reversal period, after which the NASDAQ based at highs to form a small scalp breakout. This helped bring the SP500 and Dow back into morning highs as well, but the volume was extremely light throughout the mid-day ascent. This kept the market locked into the larger range on the 30 minute charts.

Despite the pace on the spike into highs, the market turned over once again into the afternoon as the volume remained thin. The pace of the selling picked up when the market based for a short amount of time at the 5 minute 20 sma support and then broke lower. This took it back into morning lows. The NASDAQ held that level, forming another 2B on the 2-5 minute charts. The SP500 and Dow had broken further, however, only stalling as the stronger NASDAQ hit its price support. The support zone held into the close, making for even more choppy and high risk action for the last hour and a half of the day.

Coming out of the slow trading on Friday and then the holiday trading from Monday, we should start to see some better intraday action pretty soon. I'll be looking for opportunities to loosen up my risk after the current congestion, but I don't have a strong bias for intraday direction. The market is still very weak and I'm not seeing any reversal patterns form, but with a lot of selling already in place, my outlook will be wide open for moves in either direction. This mean that I will be concentrating primarily on the intraday time frames as opposed to daily and weekly charts.

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. 11: FOMC Minutes (2:00 pm)
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. 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.