Good morning! The market resumed its whippy back and forth action on the larger intraday time frames as we moved into the latter half of the week. After the extreme decline on Wednesday took the indices into support at the close with a retest of the prior NASDAQ lows on the 30 minute charts, we experienced a rounding off at lows that gave the market a more bullish bias into Thursday morning.

The divergence between the indices remained in place throughout the day. The NASDAQ gapped up into the prior morning's prices and its 5 minute 200 sma resistance, while the SP500 barely came into Wednesday's mid-day lows. This meant, however, that the NASDAQ had the most room to fall when the market began to correct off the gap, because it had the least support and the most resistance into the open.

The market correction out of the open took the NASDAQ back into its 30 minute 200 sma support and the S&P500 into the EMini's 15 minute 20 sma on the all sessions charts. It was not long before both the S&P500 and the Dow were rounding off at intraday lows. In other words, while they were making new lows just as the NASDAQ was, they were doing it to a lesser and lesser degree while correcting more in terms of price in between. This bowl-type of appearance will most often result in a strong reversal.

All three indices pulled up very quickly throughout the second half of the morning. The NASDAQ did so with a 5 minute Phoenix, while the SP500 and Dow just turned over coming out of the change in pace at lows. They had one nice continuation pattern around 11:00 ET on the 5 minute charts and then rallied into the 15 minute 200 sma in the SP500 intraday and the NASDAQ's morning highs and 5 minute 200 sma before stalling.

While the market had the potential to base mid-day and continue the rally into the afternoon, it ran into the same problems as it had on the daily charts and as seen intraday on the 6th. Just after 11:30 ET, both the S&P500 and Dow made a slightly higher high as they tried to break too quickly out of the base. This served as a trap to new bulls and set the mood for a mid-day reversal off highs.

The market gave back it's morning gains very quickly on Thursday. After pulling back into the morning lows, it rested for about an hour, creating a bear flag on the 5 minute charts as the 5 minute 20 sma tried to catch up. As the 14:00 ET reversal period hit, the flag gave way and the market was soon making new lows intraday. This drop lasted for about 30 minutes, which was enough to allow the NASDAQ to retest the lows made on November 30th.

Volume spiked as the market pivoted out of the 14:30 ET reversal period. As with the prior afternoon, this began a more choppy correction going into the close. The NASDAQ had the best trend, picking up the pace a bit as it came out of a base along the 5 minute 20 sma. The Phoenix pattern that set up with the 5 minute 20 sma break was able to bring it back to the early afternoon breakdown zone before the close.

I still am not doing a great deal with swingtrades at the moment. NCI and PWAV mentioned in yesterday's column both had nice continuation days yesterday, but overall there have not been a great deal for strong setups. I like the daily triangle on RAVN for an upside breakout, but volume is an issue because it is rather thin.

The market is still stuck in that wide range on the 60 minute charts with sharp back and forth action from highs and lows. Currently the bias is favoring a breakdown for more corrective action in terms of price and not just time, but it would have been more ideal for the bears if the market had based another day or two in the lower end of the daily range and then broke. On the monthly charts though, I'm still focused more on longer term upside. Into Friday morning we also have room again to pull higher as a greater intraday correction off Thursday's lows. The 30 minute and 120 minute 20 simple moving averages will serve as resistance.

Economic Reports and Events
Dec 09: Mich. Sentiment-Prel. for Dec (9:45 am), Wholesale Inventories for Oct. (10:00 am)
Dec 12: Treasury budget for Nov. (2:00 pm)
Dec 13: Retail Sales for Nov. (8:30 am), Retail sales ex-auto for Nov. (8:30 am), Business Inventories for Oct. (10:00 am), FOMC policy announcement (2:15 pm)
Dec 14: Export Prices ex-ag. for Nov (8:30 am), Import prices ex-oil for Nov (8:30 am), Trade Balance for Oct (8:30 am), Crude Inventories 12/09 (10:30 am)
Dec 15: Core CPI for Nov (8:30 am), CPI for Nov (8:30 am), Initial Claims 12/10 (8:30 am), NY Empire State Index for Dec (8:30 am), Net Foreign Purchases (9:00 am), Capacity Utilization for Nov (9:15 am), Industrial Production for Nov (9:15 am), Philadelphia Fed for Dec (12:00 pm)
Dec 16: Current Account for Q3 (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 stock's earnings date 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
Dec. 09: PPHM (B)
Dec. 12: COO (A),
Dec. 13: ADCT (A), BBY (?), MATK (A)
Dec 14: IES (A), WGO (B)
Dec 15: ADBE (A), APOL (B), BSC (?), GS (B), KBH (A), LEN (?), ORCL (A), PIR (?), ZQK (?)
Dec 16: GTK (B)

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.