Good morning! After another day of congestion, the market saw the strong upside day on Thursday that we were watching out for. Unfortunately, most of the day was still range bound with light volume after the initial upside was made in the form of a gap into prior NASDAQ highs on the 60 minute charts. We did get a bit more out of 10:00 ET, but the correction off that subsequent pivot high around 10:15 ET was rather quick, taking the indices back to intraday lows and pushing them into a range going into the last half of the morning.

The market began to favor the upper end of the range as early as 11:45 ET. At that point it fell into a smaller base along resistance. An initial continuation attempt was made around 12:30 ET, but lacked a significant volume increase to show conviction. The bulls tried again around 13:30 ET. This time the SP500 and Dow Jones Ind. Ave. began to break away. Despite the Dow's relative weakness, it took over as a strong early afternoon gainer as compared to the NASDAQ. With the 14:00 ET reversal period we saw some volume come back into the market and the SP500 and Dow both moved rapidly to new intraday highs.

The NASDAQ, despite holding up a great deal better than the Dow over noon, had a very tough time getting going intraday on Thursday. While it spiked a little with the 14:00 ET market rally, it still held morning highs. I feared that this would create higher odds of the market falling back into a range for the last hour as the SP500 and Dow both began a gradual pullback into the 5 minute 20 sma. As such, I missed out on that last pop of the day when the SP500 and Dow both created small bull flags on the 5 minute charts going into the 15:00 ET reversal period. It was only then that the NASDAQ finally decided to join in and make up for lost time.  I made the mistake of scratching my NQ position when it failed to move at all with the rest of the market, but this ended up being another example of the rather strong divergence the market has been forming lately between the three major indices.

My bias is still on the bullish side intraday going into Friday, but I am expecting that to play out in the morning and then be followed by a slower afternoon once again. Although I've never really found this to be the case myself as a whole, it is also options expiration day and many consider that to be a higher risk trading day. I will be looking for this daily rally to correct more heading into next week, so that is something I'll start keeping an eye out for heading into the afternoon as well.

Economic Reports and Events
Nov. 18: Leading Indicators for Oct. (10:00 am)
Nov. 21: -
Nov. 22: Existing Home Sales for Oct. (10:00 am), FOMC Minutes (2:00 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
Nov. 18: ANN (B), CPWM (?)
Nov. 21: CPB (?), CBRL (?)
Nov. 22: ABS (?), CWTR (A), DE (?), DG (B), DLTR (B), HRS (?), MIK (A), OPSW (A), PETC (?)

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.