Good morning! Wednesday was a rather substantial day for the market. It began on a weak note, gapping down into the open. Larger gaps like that have a more difficult time holding in the indices and even though the selling continued for the first 15 minutes of the day, by the 9:45 ET reversal period we started to see the bulls creep back in. The pace began to pick up on the rally, taking the indices back into their 5 minute 20 sma zone before stalling. At that point the Dow Jones Ind. Ave. and SP500 both formed 5 minute Phoenix patterns by basing near highs on declining volume. The NASDAQ pullback was a little stronger, but all three broke to new intraday highs before stalling at the larger 15 minute 20 sma and 5 minute 200 sma resistance intraday.

Due to the significant increase in the upside pace into 10:45 ET, the market corrected more gradually off morning highs. The move was not slower than average, however, and this meant the formation of a trading range heading into the early afternoon. It narrowed into 14:00 ET, holding the 5 minute 20 sma after it broke through that level coming out of the 12:00 ET reversal period.

The FOMC  minutes came out at 14:00 ET. As we have seen lately, these have been giving added momentum to the market and this time it was a positive one. After a small base at intraday highs into 14:00 ET, the market broke the highs with increased volume. This provided confirmation to the buying and helped the market continue to rally into the close.

Despite the strength of the upside move, the market didn't really see a lot for intraday setups. Pivots ruled the day until the afternoon. At that point the action was so strong that the only way to get any of it was to take just the smaller 1-2 minute bull flags. That is more aggressive simply because in most markets you cannot get away with it. Once a move kicks off like this one did, however, I stay out of its way. Trying to catch pivot highs at that point for a correction can be quite treacherous even when you see probable setups form.

Thursday is likely to be a choppy day again. After such an extreme upside move, it can be difficult for the market to sustain itself. While we do have room for a bit more upside, if that were to occur, I would expect the pace of the move to start to slow and turn over into a larger intraday correction on the 15 minute charts. Typically the correction to a strong move like this will be more hesitant unless we see some strong 2T reversal patterns where the market pulls off lows, pops back into them, breaks them by a hair (preferably at a slower speed than the first high), and then breaks lower.

Economic Reports and Events
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 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)