Good morning! The market continued to plateau on Tuesday coming out of last week's strong rally. This began last Thursday, but the volume has continued to decline overall while the market has fallen into a choppy range on the 60 minute charts. This made for another more difficult day for the market. I didn't follow the indices themselves much at all for setups because the overlap from bar to bar was so great.

As on Monday, there were some nice intraday setups on individual stocks, but you really had to have a lot of patience to wait for them to come to you. It would have been an easy day to over-trade and only serve to make your broker happy! This is something to always keep in mind when you don't have a lot of luck locating strong setups. Of the nine stocks I followed, only three had strong gains of 2-3 times the initial risk. Four scratched by barely covering commissions, while one stopped with a full stop and one with slightly smaller than a full stop. Although Monday was also slow, nothing stopped out or scratched on me.

The morning began on Tuesday with some strong divergence once again between the indices. The NASDAQ was still at the level of Monday's 15:30 ET support, while the Dow Jones Ind. Ave.  was back into the middle of Monday's range and the SP500 opened clear down at the prior day's lows. The stronger support hitting held the SP500 and Dow up a bit better early on in the day while the NASDAQ broke down into uptrend channel support on the 15 minute charts. It's relative strength helped it turn around more quickly though once that support hit.

The indices began to pick up steam out of 10:30 ET after rounding off some at intraday lows. The NASDAQ ran to new intraday highs while the SP500 and Dow moved up into the 5 minute 20 sma resistance. This stalled the move and the market corrected along resistance for about 30-45 minutes, creating a choppy buy pattern on the 5 minute charts. It aided in the correction from the price and moving average support levels that held in the first 30 minutes of the day and led to a slightly higher high on the NASDAQ 15 minute charts while the SP500 and Dow worked on closing their morning gap.

Although the pace picked up coming off the morning lows, the move as a whole was no stronger than the prior drop on the 15 minute charts. This made the indices more prone to trying to hold the trading range on the larger intraday time frames. The gap zone and prior highs stalled the rally into noon and the market began to turn over. It was a slow correction to begin with, but picked up as the 5 minute 20 sma support gave way. It still was not extreme, however, and there was a great deal of overlap in price even though the downside moves within the larger descent were rather rapid. This created an increase in the risk once again in the market as the afternoon progressed.

Even though the support held with the 14:00 ET reversal period at trend channel and moving average support on 5 and 15 minute charts as shown above, there were no strong setups in the indices for the remainder of the day. There was a 2B off the 5 minute 200 sma in the NASDAQ, followed by some choppy Bull Flags and Phoenix patterns on the SP500 and Dow, but the wider range of the patterns made for rather poor risk to reward ratios.

As we head into the latter half of the week, I am starting to look for more of a breakout from the 60 minute range. At present the SP500 and Dow are both more bearish, while the NASDAQ is also rounding off at highs. There is still a bit of room on the daily charts for one more little pop to the upside though, so I want to wait to see how the pace develops intraday for a stronger bias. At the moment the SP500 and Dow are both hugging the lower end of the range from the last few days. This is what is creating a bit more of a bearish bias, but it would not take much to turn that back around since the NASDAQ made a slightly lower afternoon low ahead of the close. This was earlier than you would typically get for a strong drop.

Economic Reports and Events
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. 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.