Good morning! The market again rather mixed on Tuesday. It was a great day intraday for technical patterns in the indices. For stock traders only, however, the pickings were rather slim. From the beginning, the SP500 showed the most relative weakness. While the S&P gapped slightly lower, the Dow Jones Ind. Ave. and NASDAQ both opened relatively flat before falling into support from the 5 and 15 minute 20 sma zone. At that point, the NASDAQ and SP500 formed an Avalanche short pattern.

A lot of the energy and home builder stocks held up well in the morning, in part due to the hurricane brewing in the Gulf. The Dow Jones Ind. Ave. managed to form a triangle buy setup while the SP500 and NASDAQ both made slightly lower lows into the 10:45 ET reversal period. This created 2B buy setups on their 5 minute charts. Although the Dow managed to make new highs, the NASDAQ had significant resistance at the opening price levels. These hit at the same time as the Dow ran into the 30 minute 200 sma resistance mentioned in yesterday's column and the upside pace in the market began to slow and turn over going into the early afternoon.

Shortly after 12:30 ET, the market started to hug the lower end of the uptrend channel intraday at the 5 minute 20 sma. With declining volume, this formed a short setup into the early afternoon. The selling was assisted by the newest hurricane advisory showing that Wilma was looking to turn into Florida instead of hitting more of the oil services. That sector plunged into 13:30 ET and the rest of the market also corrected strongly off the mid-day highs.

The market hit strong support at prior lows on the 15 minute charts going into the 13:30 ET reversal period. Volume spiked at that time, indicating exhaustion, and the indices bounced back into 5 and 15 minute 20 sma resistance levels. The NASDAQ had the most relative strength at that time and made it back up into the prior breakdown zone before pivoting at that resistance level. The move back to intraday lows created another reversal pattern on the 5 minute charts as the indices reversed again with a slightly lower low in the SP500 and Dow at the 15:00 ET reversal period. Prior highs and move intraday moving average levels served as resistance on the 5 and 15 minute charts as shown. These held perfectly and the market dropped lower into the close, making for a lot of back and forth action, but off strong support and resistance levels that were easy to time.

Given the choppy action on the upside over the last couple of days, followed by the stronger breakdown Tuesday afternoon, it seems like we will be stuck in a more gradual correction off last week's lows as this one progresses. This is not a great deal of rest given the prior drop in order to see a strong daily downside continuation so quickly, but at the same time there are not many nice daily buy setups. Intraday, the market is looking weaker heading into Wednesday morning. Prior intraday lows will be support levels.

Economic Reports and Events
Oct 19: Building Permits for Sep (8:30 am), Housing Starts for Sep (8:30 am), Crude Inventories 10/14 (10:30 am), Fed's Beige Book (2:00 pm)
Oct 20: Initial Claims 10/15 (8:30 am), Leading Indicators for Sep (10:00 am), Philadelphia Fed for Oct (12:00 pm)
Oct 21: -
Oct 24: -
Oct 25: Consumer Confidence for Oct (10:00 am), Existing Home Sales for Sep (10:00 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 19: ABT (B), ACXM (A), AEIS (?), ACL (A), ADS (?), MO (B), ABK (B), AMGN (A), BAC (?), CRUS (A), CIT (B), CNF (?), CMA (B), CAL (?), CBST (A), ET (A), EK (B), EBAY (A), EFII (?), EMC (B), FLIR (B), GD (B), GNTX (B), HAR (A), HON (B), HCBK (B), HBAN (B), ITW (08:00 am ET), RX (B), ISIL (A), IFIN (A), JPM (B), JNPR (?), NITE (?), LEG (?), KRB (B), MOGN (A), NABI (A), NFLX (?), NYB (B), NTRS (?), ODP (B), PMCS (A), PLCM (A), QLGC (A), RDN (A), RBAK (?), SBC (B), STJ (08:00 am ET), SNV (?), TCB (?), NYT (B), VRSN (4:15 pm ET), WM (A)
Oct 20: ACS (??), AFFX (4:00 pm ET), BAX (?), BRCM (A), COF (A), CLS (A), ED (?), CREE (?), CY (B), DHR (B), ELNK (B), LLY (?), EFX (B), FISV (A), F (?), FDRY (A), FSL (A), GNSS (A), GDW (?), GOOG (?), HLIT (A), HYSL (A), ICOS (?), INFA (?), IR (B), XXIA (A), JBLU (B), LH (B), LVLT (?), MCD (B), MEDI (B), MENT (A), MCHP (A), NE (B), NOK (?), NUE (?), OI (?), ONNN (A), OSI (B), PFE (?), PNC (?), DGX (B), RHI (?), ROH (B), SNDK (A), SAP (?), SLM (B), LUV (B), LUV (B), STLD (?), SYNA (A), TLWT (?), TPX (A), TXT (B), BK (B), KO (B), HSY (B), MHP (B), TQNT (?), UPS (B)
Oct 21: AT (B), T (B), CAT (07:30 am ET), ECL (B), HIB (?), HCR (B), MYG (B), RSH (?), SLB (B), ERICY (01:30 am ET), WY (B)
Oct 24: ALTR (4:15 pm ET), ACF (A), ACI (B), ASN (B), ASH (?), ATHR (?), CD (A), CCU (A), CNET (A), FDG (?), TV (?), JCOM (?), JCI (B), KMB (B), LNCR (A), MACR (A), MRK (B), NBR (A), NBIX (?), PTV (A), PBI (A), PCL (A), PLAY (A), RCII (A), SGP (B), SLAB (B), TXN (A), TRI (B), UDR (A), VLTR (A)
Oct 25: ABGX (A), ACE (A), AKS (?), AKAM (A), AW (A), AMX (A), AMTD (B), AJG (A), AT,L (?), AVB (A), BLS (B), BXP (A), BP (02:00 am ET), BNI (B), CHRW (A), CTX (A), CME (B), CHIR (4:45 pm ET), CB (A), COH (?), CA (?), CVH (B), DST (A), DD (B), ESV (?), FFIV (?), FLEX (?), FBR (A), GNW (A), HAL (B), HCA (B), N (?), INSP (A), IP (B), ISSX (A), ISRG (?), KIM (B), LAB (B), LCAV (B), LXK (B), LMT (B), MDG (A), MTH (?), MUR (A), NCI (08:35 am ET), PNR (?), PKI (A), PPP (?), RFMD (?), SEPR (B), SHW (?), SIMG (A), SSTI (A), SIRF (A), SO (B), STM (A), TLAB (B), TIN (B), JOE (B), TMO (A), TUP (B), UPL (A), X (?), WAT (?), WBSN (A)

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.