Good day! The market had a pretty choppy start this week. Going into the day I didn't have a strong bias on direction since the 60-minute charts were still favoring the bears by slower upside moves while the daily charts have been hitting a pretty strong support level. This struggle spilled over into Monday and led to a continuation of the trading range from the prior two trading days.

Overall it was a pretty slow day for me since it was the first back after vacation. I did find a few decent setups intraday, but nothing new for swingtrades. Support and resistance levels held well. The first hit with the Dow Jones Ind. Ave. coming into the 5-minute 200 sma and the NASDAQ hitting prior afternoon pivot highs between 9:45 ET and 10:00 ET. This led to a bit of a pullback before the indices ran to new intraday highs at the 10:45 ET reversal period.

This time the markets hit some larger time frame resistance as the NASDAQ came into its 15-minute 200 sma with the late morning reversal period. Since the overall pace of the rally intraday was pretty strong, the correction began more slowly, hitting initial support at the 5 minute 20 sma. Here we saw a small base before the support gave way to further downside into noon, dropping into support hit as the market pulled into prior lows from the morning.

The market corrected pretty slowly off the support level and volume remained light despite the move higher. This led me to believe that the buying was not enough to hold up the market into the afternoon and I looked for a 15-minute short in the weaker NASDAQ. It triggered coming out of the 14:00 ET reversal period in the 1490 zone on the NQ (NASDAQ EMini) and continued into equal move support at about 14:30 ET. Since the drop was so rapid, I was actually looking for a bear flag on the 5-minute charts to continue the selling, but the buying picked up, leaving the only pattern left for the day a pivot off the 15:00 ET resistance at prior highs. Although this was a significant resistance level, the strength of the move into it made it a more risky candidate for pivot trading, but the level held and the market sold off well into the close.

In CVS the support is the 20-day sma. I want to see this hold for the trade to remain open. XEC and UNT both held their ranges Monday, but still look good. The market as a whole still looks lower also on Tuesday after several days of ranging at these levels, but the risk remains that the support zone can continue to hold and new lows might only break by enough to trap and flush traders instead of giving us a strong drop without a larger bear flag.

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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.