Good morning! The market ended last week on a positive note after 2 1/2 days of strong selling. The lows we were looking at from Thursday held the daily support very well, although it did take a few hours for the market to really get off the ground. The morning was still rather unambitious. After opening into resistance at the 15 minute 20 sma zone in the NASDAQ Composite and S&P500, the market began a steady selloff for the first hour of the day.

The early morning correction ended once the weaker Dow Jones Ind. Ave. ran into its prior day's lows. It broke that level by a few ticks, serving as a trap to create a double bottom reversal pattern called a 2B. The pace in the market gradually began to change coming off that low as the bulls picked up steam and the bears became less optimistic. The pivot from lows took the NASDAQ and S&P500 back into morning highs, while the Dow rallied into its own resistance at the 15 minute 20 sma. These came together at the same time as the S&P500 also hit its 5 minute 200 sma.

This second intraday pivot off highs began quickly, but took a lot longer to correct as a whole than the prior two moves. The decline ended as the 12:00 ET reversal period hit. The entire time, the Dow and NASDAQ both hugged the 15 minute 20 sma, creating a bullish bias into the early afternoon since the downside occurred on very light volume.

As the 13:00 ET reversal period hit, the market broke higher. Since it was the end of the week on a choppy trading range, the rally into the afternoon was nothing extreme, but the follow through was fairly smooth going into the prior day's highs in the S&P500. Throughout the rally, the 5 minute 20 sma held very well. Once that S&P resistance hit, however, the indices began to pull back a bit. This late afternoon correction continued into the close, with gradual declines in the S&P500 and Dow and a choppy, sideways trading range in the NASDAQ on the 5 minute charts.

I have a very open bias going into this week. While the pace in the market is more bearish overall because the downside moves have been sharper than the upside ones, the rounded lows on the 30 minute charts give it the potential to form a very shallow cup with handle on the 30-60 minute charts to pull it back to the highs of the daily range. Overall I'm not finding a great deal for buy setups, however, so I plan on relying more on the intraday action for guidance again. While the daily and 30-60 minute charts have provided a great bias lately for the next trading day, the reaction to Friday's move higher has a few more options. I don't think it's likely we will see any strong decline initially on Monday. The market is more likely to either pick up steam to the upside or fall into a morning trading range.

Updates: NCI and PWAV from last Wednesday's column are performing nicely. RAVN also remains of interest as a buy this week, but will have added risk due to its light volume. NTRS, which I have from mid-October as a position trade buy is now breaking out again to highs. The 20 week sma and 100 day sma are support. HSP, a position trade from early September, is currently basing again and also has support at its 20 week sma zone.

Economic Reports and Events
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. 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)