Good morning! After a strong close on Monday, the market was still looking higher going into the next morning. Despite a gap lower into the open, the indices fell into a range until the 5 minute 20 sma caught up to them. At that point they once again broke higher. The NASDAQ had the most difficult time. While the SP500 and Dow Jones Ind. Ave. both broke the prior afternoon highs, when the NASDAQ hit them it stalled. This occurred around 10:30 ET and the resistance held very well. It would end up being the highs of the day.

The correction from the 10:30 ET pivot was gradual to begin with. After stalling only briefly at the 5 minute 20 sma, the pace began to pick up. The SP500 and NASDAQ both fell into the zone of Monday's afternoon trading range, which is a strong price support level. The stronger Dow managed to only retrace back to morning lows and the 15 minute 20 sma. All of these support levels came together around 11:30 ET and led to a correction over lunch.

With the late morning change in pace to the downside, the term "mid-day doldrums" was an apt description of the market well into the early afternoon. It was not until the 13:00 ET reversal period that we began to see some more action. It began slowly with a break in the lows of the mid-day range. Then began to pick up heading into 13:30 ET. This decline brought the indices into both price and moving average support with the 5 minute 200 sma intraday hitting in all three indices, as did the 60 minute 20 sma. The Dow was also at the congestion zone from the prior afternoon and 15 minute 200 sma support intraday while the NASDAQ had pulled back into Friday's highs.

Traders seemed a bit leery of Tuesday's late day market support at first. The reversal began very gradually with a lot of overlap from about 13:40-14:30 ET. This slowed the selling despite slightly lower lows and it helped to change the pace to allow for a strong bounce later on. It began with a move back into the mid-day range and then a pullback nearly into the lows of the day was followed by an even stronger pivot that took the SP500 and Dow back to lunch time highs.

With the action into Tuesday's close, I am not seeing much for strong downside patterns intraday. There is still more room for the market to correct from the support seen over the last couple of days. The upside lately has been a lot stronger than the downside moves intraday and until we see that slow and start to turn over, we are likely to remain heading higher. It can certainly remain choppy, however, until we get more into the prior breakdown zone on the daily charts of the SP500 and Dow with about the 50 day sma resistance.

Economic Reports and Events
Oct 26: Crude Inventories 10/21 (10:30 am)
Oct 27: Durable Orders for Sep (8:30 am), Initial Claims 10/22 (8:30 am), Help-Wanted Index for Sep (10:00 am), New Home Sales for Sep (10:00 am)
Oct 28: Chain Deflator-Adv for Q3 (8:30 am), Employment Cost Index for Q3 (8:30 am), GDP-Adv for Q3 (8:30 am), Mich Sentiment-Rev for Oct (9:45 am)
Oct 31: Personal Income for Sep (8:30 am), Personal Spending for Sep (8:30 am), Chicago PMI for Oct (10:00 am)
Nov 01: Construction Spending for Sep (10:00 am), ISM Index for Oct (10:00 am), Auto Sales for Oct (12:00 am), Truck Sales for Oct (12:00 am), FOMC policy announcement (2:15 pm)

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 26: AGR (B), APD (?), ATI (B), MDRX (A), AHC (?), AHM (?), APCC (A), AMKR (A), APPB (A), AMCC (A), ARBA (A), ARRS (A), ADP (B), AVX (B), BIDU (A), BLDP (B), BEAV (B), BIIB (A), BOW (B), CDN (A), ELY (A), CAH (B), COGT (A), CYH (A), COP (B), GLW (A), CSX (?), DCX (?), DO (?), DBD (B), DRIV (A), DRE (A), ECA (?), EPD (?), ERES (A), ESRX (A), EXTR (A), GRMN (B), GMR (A), GRP (B), GW (A), HRS (A), IDXC (B), JNS (B), JNY (B), KMG (?), KOMG (A), LLL (B), LEA (B), LPNT (A), LPX (?), LSI (A), LU (?), MXO (A), WFR (?), MGM (B), MCRL (A), MNST (B), NTGR (A), NEM (?), NSC (?), OMX (?), OPWV (?*), PFCB (1:00 pm ET), PDG (A), PLUG (B), PX (B), PHM (A), RAI (B), R (B), SEE (?), SII (B), SSCC (B), S (B), HOT (B), TROW (B), TASR (B), TMX (A), BA (B), EL (B), FAF (B), NDAQ (A), TRID (A), UMC (?), VAR (A), VRTX (A), WC (A), WLP (06:00 am ET), WWY (?), XEL (B), YCC (B), ZMH (A)
Oct 27: AET (B), AAI (B), ALA (?), AEE (B), AXL (B), AMMD (A), ANDW (?), AU (?), APA (B), ABI (B), AZN (?), AN (B), AVID (A), AVT (?), BLL (B), ABX (A), BEBE (?), BDK (B), BG (B), BR (A), CTL (B), CRDN (B), CIN (B), CCE (B), CTV (A), CPWR (A), CNXT (A), CFC (B), ELN (B), ELX (?), XOM (?), BEN (?), FMT (B), GGC (A), GP (B), GSK (07:00 am ET), GR (B), HC (?), HLT (B), IMCL (B), IM (A), IRF (A), IVGN (A), ITT (?), KLAC (A), LEXR /A(, LIZ (?), LTR /B(M LYO (B), MRO (?), MEE (A), MXIM (A), MFE (A), MWV (B), MET (A), MSFT (?), MCEL (?), MLNM (?), NCR (B), NXL (?), NWL (B), NFX (B), NXTP (B), NXG (A), OLN (A), PHS (B), PRX (B), PTEN (B), PENN (07:00 am ET), PD (B), PGN (B), QLTI (B), STR (A), RTN (B), RNWK (?), RSAS (A), SAPE (A), SPG (A), SKM (05:00 am ET), SNE (B), SWN (A), STA (B), SU (B), TKLC (A), TNE (B), TRA (B), DOW (B), THQI (A), TDW (B), TSM (08:00 am ET), UNP (?), UHS (A), UST (B), VSEA (A), VZ (?), VTSS (A), VMC (A), WLT (?), WMI (B), WFT (B), WEN (?), WDC (A), YELL (A), ZHNE (A)
Oct 27: AET (B), AAI (B), ALA (?), AEE (B), AXL (B), AMMD (A), ANDW (?), AU (?), APA (B), ABI (B), AZN (?), AN (B), AVID (A), AVT (?), BLL (B), ABX (A), BEBE (?), BDK (B), BG (B), BR (A), CTL (B), CRDN (B), CIN (B), CCE (B), CTV (A), CPWR (A), CNXT (A), CFC (B), ELN (B), ELX (?), XOM (?), BEN (?), FMT (B), GGC (A), GP (B), GSK (07:00 am ET), GR (B), HC (?), HLT (B), IMCL (B), IM (A), IRF (A), IVGN (A), ITT (?), KLAC (A), LEXR /A(, LIZ (?), LTR /B(M LYO (B), MRO (?), MEE (A), MXIM (A), MFE (A), MWV (B), MET (A), MSFT (?), MCEL (?), MLNM (?), NCR (B), NXL (?), NWL (B), NFX (B), NXTP (B), NXG (A), OLN (A), PHS (B), PRX (B), PTEN (B), PENN (07:00 am ET), PD (B), PGN (B), QLTI (B), STR (A), RTN (B), RNWK (?), RSAS (A), SAPE (A), SPG (A), SKM (05:00 am ET), SNE (B), SWN (A), STA (B), SU (B), TKLC (A), TNE (B), TRA (B), DOW (B), THQI (A), TDW (B), TSM (08:00 am ET), UNP (?), UHS (A), UST (B), VSEA (A), VZ (?), VTSS (A), VMC (A), WLT (?), WMI (B), WFT (B), WEN (?), WDC (A), YELL (A), ZHNE (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.