Good morning! The market saw its strongest single day rally since April of last year on Tuesday, reversing Monday's downtrend day with a strong uptrend one. The indices kicked off the move with a gap higher, taking the S&P 500 into Monday's highs. By the end of the day the Dow Jones Industrial Average ($INDU) managed to gain a whopping 194.99 points, closing at 11,268.77. The S&P 500 ($SPX) rose 22.32 points to 1,307.65 and the Nasdaq Composite ($COMPQ) tacked on 44.98 points to end at 2,356.14.

After the strong open, the market had a little bit of trouble at highs, falling into a choppy range along the larger 15 minute resistance levels. Volume declined, but the indices held up. When the 11:00 ET reversal period hit, the market began its second ascent of the day, breaking to new intraday highs on stronger volume. This mid-day rally moved steadily until hitting equal move resistance on the 15 minute charts, as seen on the 15 minute Nasdaq EMini chart.

The indices began to round off at highs into the 13:00 ET reversal period. The pace picked up on the selling until the 14:00 Fed minutes were released. This gave the bulls some extra fuel, hinting that the steady increase of interest rate hikes would finally be coming to a close. The initial reaction was swift, kicking off a third wave of upside intraday, but it corrected quickly back to the 5 minute 20 sma before slowly resuming once more into the close.

Typically, following three waves in a trend, the market will then attempt to put in a longer correction. This can be a larger base than the prior two, lasting about 1.5-2 times the prior corrections and leading to a fourth move higher before breaking the trend, or it might be an inside range day, or a larger price reversal. For the first scenario to take place I would expect a narrow range early on in the day. Any rapid decline out of the open would be more likely to create a larger trading range on the 15 minute charts.

Semiconductors (+3.4%) and home builders (+3.5%) saw the strongest gains on Tuesday, with utilities, transportation stocks, retailers, oil and energy also showing solid upside. The oil sector had some help with crude moving to a record $71 a barrel. Many of these stocks continued to give this pattern coming off those pullbacks to the 10 and 20 day simple moving averages that we have been following this week. A lot of them were also continuation moves of stocks that hit those levels yesterday or Thursday. I don't expect this strategy to be quite as lucrative on Wednesday though due to the current market placement. We just won't be as likely to see as many. There is also less of a chance of a trend day on Wednesday due to having had two in a row.

Economic Reports and Events
Apr 19: Core CPI for Mar (8:30 am), CPI for Mar (8:30 am), Crude Inventories 04/14 (10:30 am)
Apr 20: Initial Claims 04/15 ((8:30 am), Leading Indicators for Mar (10:00 am), Philadelphia Fed for Apr (12:00 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 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
Apr 19: ABT (?), ADS (?), ABK (?), ASD (B), AAPL (A), ARMHY (?), ASML (01:00 am ET), T (B), CIT (B), CMA (B), CSX (?), CBST (?), ET (A), EBAY (?), FSL (?), GD (?), GENZ (B), HON (B), HCBK (B), HBAN (B), RX (A), INTC (A), JPM (B), JCI (B), JNPR (A9, KMI (4:30 pm ET), KFT (A), MDC (A), MOGN (A), NVLS (?), OSI (A), QCOM (A), RDN (A), STJ (B), STLD (A), SWFT (A), TCB (B), KO (B), UTX (B)
Apr 20: ALK (?), MO (?), AGIX (B), BAX (B), BBT (B), BLS (?), BHE (B), BRCM (A), CNI (?), COF (A), CERN (?), CBE (?), CREE (?), CY (?), DHR (B), ELNK (B), LLY (?), EMC (B), EFX (?), FFIV (?), FCS (B), FDC (A), FDRY (?), GM (08:00 am ET), GNTX (08:30 AM), GYI (?), GDW (?), HYSL (A), ITW (08:00 am ET), N (?), INFA (A), IGT (?), ISIL (?), XXIA (?), LSTR (?), MAR (B), MWV (B), MEDI (B), MRK (B), MOLX (4:00 pm ET), NE (B), NUE (B), DGX (B), RHI (?), RYL (B), SNDK (A), SAP (?), SGP (B), LUV (B), SYK (A), SPWR (?), SYNA (A), TPX (A), TXT (B), BK (B), HSY (B), NDAQ (?), UNP (A), UPS (B), VRSN (4:15 pm ET), XRIT (?), ZHNE (A), ZION (A)
Apr 21: MMM (?), ACI (B), F (B), HAL (B), IR (B), OXPS (?), RSH (?), SLB (06:00 am ET), ERICY (?), WYE (?)
Note: All economic numbers and earnings reports are in lines with those compiled by Yahoo Finance. Occasionally changes will occur that are made after the posting of this column.

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.