Good morning! Due to the market still at the larger time frame daily resistance from the prior highs on daily and weekly charts, things remained on the choppy side as we kicked off the new week. The lack of follow through on the breakdown attempt Friday afternoon helped to hold up the market as a whole, but the upside still remained exhausted. Volume was light throughout the day and it was a difficult one if you tried to be to aggressive.

The morning began once again with a slight upside gap, similar to Friday's open. This was also at price resistance from prior highs on the 15 minute charts and the market was selling off within ten minutes. The pace on the selling, while not extreme, was still on the strong side. After only a small reprieve at the 5 minute 20 sma, the decline continued until the indices came into price support from Friday's late day range and the 15 minute 20 sma zone. All in all, the type of action was nearly identical to Friday morning.

The market diverged from Friday's action heading into lunch. While the upside was still choppy, the retracement of the prior decline was a lot greater. A few small 2-5 minute pullbacks took the market back into the zone of morning highs, although it still held back just a bit. From about 12:30 to 14:00 ET, the market formed a shallow Cup with Handle on the 15 minute charts heading back into the 15 minute 20 sma support. Since the initial rally off morning lows was so gradual, this shallow pattern meant that upside follow through would more likely be on the quicker side. It took a bit of time to get going, however, once it triggered around 13:45 ET. The 14:00 ET reversal period helped out a lot and propelled the indices into a more solid test of morning highs and an equal move on the 5 and 15 minute charts in the SP500 and Dow Jones Ind. Ave.

I was initially looking for a continuation of that move due to the pace change towards a stronger upside. Around 14:30 ET though, the SP500 and Dow both rounded off at highs by trying to make new highs too quickly. This turned that short term pace back around and led to a faster pullback to the 5 minute 20 sma support. At that point the NASDAQ formed a small reverse Cup with Handle in the form of an Avalanche along the 5 minute 20 sma that pulled things back into mid-day support going into the last reversal period of the day at 15:30 ET.

We are seeing some divergence on the daily charts between the three indices. The SP500 has a bit of room that they can more higher intraday. It had been basing for the last couple of days at recent highs and has potential for a breakout continuation. The NASDAQ, on the other hand, is acting more overbought and is rounding off on the 60 minute charts. Over the last three trading days it has been making very gradual higher highs. This tends to trap bulls. With this divergence, I am putting more focus on intraday and position trade setups at this time than I am on swingtrades. For daytrade buys I will be sticking primarily to news plays due to the daily resistance zone.

Economic Reports and Events
Nov. 08: -
Nov. 09: Wholesale Inventories for Sep (10:00 am), Crude Inventories 11/4 (10:30 am)
Nov. 10: Export ex-ag. for Oct. (8:30 am), Import Prices ex-oil for Oct. (8:30 am), Initial Claims 11/05 (8:30 am), Trade Balance for Sep (8:30 am), Mich. Sentiment-Prel. for Nov. (9:45 am), Treasury Budget for Oct. (2:00 pm)
Nov. 11: -
Nov. 14: -
Nov. 15: Core PPI for Oct. (8:30 am), NY Empire State Index for Nov. (8:30 am), PPI for Oct. (8:30 am), Retail Sales for Oct. (8:30 am), Retail Sales ex-auto for Oct. (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
Nov. 08: AL (?), AQNT (B), AVNX (?), CVC (B), CMX (B), CBB (?), CHR (B), CMLS (B), BOOM (B), DYN (B), DISH (?), FSH (A), FOSL (?), GGB (B), GG (A), HL (B), HOMS (A), HRP (B), INPC (A), IDTI (A), IVX (?), IVIL (?), LAMR (B), MAC (B), MDR (A), MCK (A), MRX (A), PIXR (A), PDE (A), SNY (01:00 am ET), SOHU (3:00 pm ET), SONS (A), SGY (A), TS (A), TERN (A), TOL (?), RIG (B), VC (B), WGR (B)
Nov. 09: ALVR (B), DOX (A), BRKS (A), CF (A), CSCO (A), CDE (B), RIO (A), CYPB (?), DT (B), FST (A), HANS (?), IO (A), IIJI (B), IVAN (?), JDSU (A), KG (B), L (?), LGF (A), LOUD (?), MVL (B), TMR (?), MT (?), NVDA (?), SNDA (A), IPG (B), LCC (B), WFMI (A)
Nov. 10: AEG (02:00 am ET), CPST (?), DELL (A), ECR (A), EPL (B), HSP (07:30 am ET), IGT (B), KSS (A), NWS (A), PSUN (A), PBY (?), COL (B), SPC (?), TGT (B), TLWL (07:00 am ET), PGR (?), UBB (?), URBN (B)
Nov. 11: PDA (?)
Nov. 14: A (A), BGO (A), BLI (?), BIZ (?), ERJ (B), LOW (?), TSN (?), WMT (?)
Nov. 15: ANF (A), AEOS (B), ADI (A), ARM (B), BJ (B), CNR (?), DKS (B), HMA (B), HD (B), JCP (?), LZB (A), ROST (B), SPLS (B), TJX (B), VOD (?)

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.