Good day! As we head into the new week, the market is having a pretty tough time. As mentioned Friday morning, the market still has room to move until we see some weekly support from last October levels. It made good headway towards that zone as the week ran to a close, however, with even more selling to end the week. We didn't get much for even daytrades on the long side since the market opened low and just kept going throughout the day to put in the third downtrend day in a row. That is actually quite an accomplishment and not something you see too often.

After the morning gap, the indices fell into a range for about 2 hours as the market corrected to the initial drop that started off the day. As the 11:00 ET reversal period rolled around we started to see it favor the lower end of the triangle it was forming on the 5 minute charts. This created a perfect breakdown set-up shortly thereafter as the light volume finally gave way to heavier selling over lunch. It wasn't a strong drop though. The market fell into a smaller triangle going into noon where volume dropped off again before hitting another low with the 13:00 ET reversal period.

Generally, most trend moves on the intraday charts don't last for more than 3 days without at least resting enough to break their 15 minute 20 simple moving averages. Many times they don't make it past 2 1/2 days. This meant that risk started to increase into the afternoon on new intraday shorts. We never saw any decent reversal patterns though, and the market held prior 5 minute highs and the 15 minute 20 sma for still another wave of selling into the close, again with choppier follow through.

With Friday's volume spike and three days of selling already in now in the SP500, NASDAQ and Dow Jones Ind. Ave., I am a great deal more cautious on shorting. The market does still have room to move on the weekly and monthly charts, but it's very extended now intraday. The huge increase in volume tends to indicate exhaustion, so while I'm not seeing any reversal patterns just yet, I am starting to look for at least a short term correction. With the strength of the descent, it is likely to be a rather gradual one, pulling up very slowly or starting off with rounded lows intraday.

Our DG we've been following has also pulled back out of it's base on Friday, so we might not actually get a setup for an upside breakout on this one. MRK on the other hand, performed very well, although it's at my target area and tight trailing stops hit Friday afternoon as the morning lows and 15 minute 20 sma gave way. I have no new swing trades I'll be watching going into the week.

Economic Reports and Events
Apr 18: -
Apr 19: Building permits for Mar (8:30 am), Core PPI for Mar (8:30 am), Housing Starts for Mar (8:30 am), PPI for Mar (8:30 am)
Apr 20: Core CPI for Mar (8:30 am), CPI for Mar (8:30 am), Fed's Beige Book (2:00 pm)
Apr 21: Initial Claims 04/16 (8:30 am), Leading Indicators for Mar (10:00 am), Philadelphia Fed for Apr (12:00 pm)
Apr 22: -
Apr 25: Existing Home Sales for mar (10:00 am)
Apr 26: Consumer Confidence for Apr (10:00 am), New Home Sales for Mar (10:00 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
Apr 18: MMM (B), BAC (B), CHKP (B), CKR (A), CCK (A), LLY (B), HAS (B), IBM (?), JCOM (A), LNCR (A), MDC (A), NSC (?), NVLS (A), PH (B), PHG (01:00 am ET), STI (B), TXN (4:30 pm ET), UDR (A), WERN (A)
Apr 19: ADTN (B), ASD (B), ASO (B), ARMHY (?), BOL (B), BSX (B), CDWC (?), CHB (A), CHFR (A), CNB (B), CYMI (?), DHI (B), DOV (A), EMC (B), FRX (?), FCX (B), GM (08:00 am ET), GILD (A), ITW (08:00 am ET), RX (A), N (A), INTC (?), JNJ (B), JCI (B), JNPR (A), KFT (A), LH (B), LU (?), MEL (?), MGG (B), NCC (?), NTRS (B), PTV (A), RSH (?), SAFC (?), STX (A), SGTL (A), SGI (?), SOV (A), STT (B), SYK (A), SVU (B), SY (B), TASR (B), TER (A), CAKE (A), KO (B), USB (B), WFC (A), YHOO (?)
Apr 20: ALGN (?), ADS (?), MO (?), ABK (B), DOX (A), AWA (?), ATMI (B), CNI (?), COF (A), CAT (B), CLS (A), CINF (B), CIT (B), CTXS (A), CNF (B), CMA (B), CNXT (?), CAL (B), CTB (B), CBST (A), DCN (?), ET (?), EBAY (?), EPIC (A), EXTR (A), EYET (A), FFIV (4:00 pm ET), FLIR (?), F (?), GD (?), GNTX (?), GDW (?), HET (?), HON (08:00 am ET), JPM (B), JNS (B), KMI (?), NITE (B), LLTC (?), ¸LIN (?), MERQ (A), MOT (A), NYB (B), NCX (B), OMM (A), PMCS (A), PLCM (A), QCOM (?), RDN (A), RYL (A), SBC (08:00 am ET), FON (B), STJ (B), TCB (B), TLAB (B), ALL (A), BK (B), UTX (B), VRSN (?), WEBX (A), WYE (B), YUM (A), ZHNE (A)
Apr 21: ACS (?), AFFX (A), ACL (?), ATI (B), AT (B), ABC (B), AMGN (?), ARBA (A), T (?), ADP (B), BAX (B), BEBE (?), BLS (B), BRCM (A), CZR (B), ELY (A), ED (?), CMI (B), CY (B), DHR (B), DV (?), DCLK (A), ELNK (B), ECL (B), ELX (?), FHN (B), FISV (A), FDRY (A), FSL (A), GENZ (B), GVHR (?), GOOG (?), GDT (?), HAR (?), HLIT (A), HSY (A), HYSL (A), INFA (A), IR (?), IGT (B), ISRG (A), LEG (A), MAR (B), KRB (?), MCD (B), MEDI (B), MRK (?), NFLX (A), NE (?), NOK (?), NWAC (B), NVS (?), NUE (?), OI (?), ODP (B), OMX (?), PNC (?), DGX (B), RHI (A), ROH (B), RCL (B), SNDK (A), SAP (?), SGP (B), SFA (A), SHW (B), SWIR (A), SIMG (A), SSTI (A), SLM (B), SDS (A), SYNA (A), TPX (A), TSRA (A), TXT (B), TQNT (A), UCBH (A), UNP (?), UPS (B), VLO (?), VTSS (A), WDC (A), WY (?), WHR (06:00 am ET), XRX (B), XLNX (A), YELL (A), ZION (A)

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.