Good morning!  Following Tuesday's rounded lows, the market saw a continuation off those levels as anticipated heading into Wednesday morning. All three indices, the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500, made it back into Thursday's highs within the first hour of trading. Those levels did serve as strong resistance, however, and the market held them for the remainder of the day as it continued the larger correction off last week's highs.

Even though the market as a whole did not break through the new yearly highs made last week in the Dow, that index still managed to put in its highest close in six years. By the end of the day the Dow ($INDU) closed 71.24 points higher at 11,254.49. The S&P 500 ($SPX) gained 3.67 points to end at 1,305.41. The Nasdaq Composite ($COMPX) also rose slightly on the day as a whole, adding 3.33 points and closing at 2,333.63. Overall, however, most of the intraday action was bearish. The Dow performed the strongest, holding within the upper half of its day's range throughout most of the session, but the S&P 500 and Nasdaq formed a downtrend until the last 45 minutes of the day.

After hitting highs, the S&P 500 and Nasdaq formed 5 minute Head and Shoulders patterns, breaking out of the right shoulder as the 5 minute 20 sma support gave way. The Nasdaq fell to new intraday lows while the Dow and S&P 500 found support at the 5 minute 200 sma. The indices attempted a third wave of downside on the 5 minute charts, but the support, combined with the exhaustion move in the Nasdaq kept it from breaking solidly to new lows and instead this smaller trend corrected off the 12:00 ET reversal period into the early afternoon.

An initial upside pop was followed by a Phoenix in the form of a Cup with Handle in the Nasdaq, but the Dow and S&P did not react as much due to their more narrow range. The Nasdaq then formed a second 5 minute Head and Shoulders pattern by falling again to its 5 minute 20 sma, basing and breaking down out of the 14:00 ET reversal period. Two more waves of selling following, completing another series of the three wave downtrend move before the market corrected off lows for the last 45 minutes of the session after the Nasdaq hit support from the prior two day's lows and the S&P 500 closed the morning gap.

I am still leaning towards more of a continuation to the correction off highs into Thursday. The major economic numbers still due out this week are the employment and jobs data. The Dow is likely to continue to show the most relative strength.

Note: I will be taking tomorrow evening off, but will be back with a fresh column on Monday! Have a great remainder of the week and weekend!

Economic Reports and Events
Apr 27: Initial Claims 04/22 (8:30 am), Help-Wanted Index for Mar (10:00 am)
Apr 28: Chain Deflator-Adv. For Q1 (8:30 am), Employment Cost Index for Q1 (8:30 am), GDP-ADV. for Q1 (8:30 am), Mich Sentiment-Rev. for Apr (9:50 am), Chicago PMI for Apr (10:00 am)
May 01: Personal Income (8:30 am), Personal Spending for Mar (8:30 am), Construction Spending for Mar (10:00 am), ISM Index for Apr (10:00 am)
May 02: Auto Sales for Apr (12:00 am), Truck Sales 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 27: ARDI (A), ABB (12:00 am ET), EYE (B), AET (06:00 am ET), AAI (?), ALA (?), AYE (A), ALTR (A), APC (?), ANDW (?), APA (?), BZH (B), BEBE (?), BDK (B), BOW (B), BC (B), BG (B), CAH (B), CLS (A), CTL (B), CRDN (?), CCE (B), COGT (A), CMCSA (B), BVN (?), CNXT (?), CNX (B), CAM (?), CFC (B), DCX (?), DDR (A9, DRIV (A), DTAS (4:00 pm ET), DOV (A), EMN (A), ELX (?), FLEX (?), BEN (B), GTW (?), GGC (A), GSK (?), HC (?), HLIT (A), HET (?), HIG (?), IDNX (?), IKN (?), ILOG (10:00 am ET), IRF (?), ISRG (A), IVGN (?), JNS (?), K (B), KLAC (A), KLIC (B), LPNT (A), LIZ (B), LYO (B), MRO (?), MEE (A), MET (A), MGM (B), MSCC (A), MSFT (A), MLNM (B), MRH (A), MPS (?), NENG (B), NWL (B), NFX (?), NXY (B), NIHD (?), OI (?), OLN (A), OCR (B), ONNN (A), QLTI (B), RACK (A), RTN (B), ROK (B), R (B), SSTI (A), SPF (A), HOT (B), SPN (?), TNE (B), DOW (B), UHS (?), VSEA (A), WEBX (A), WEBM (A), WEN (?), WDC (A), XEL (?)
Apr 28: AXL (?), ARM (B), ATW (?), ADP (B), AVP (?), CCJ (?), COCO (?), CVH (?), CMI (B), GERN (B), TX (?)
May 01: CHK (A), BGC (A), HRS (A), HUM (05:00 am ET), IVAC (?), NR (A), NXG (?), PLAY (A), PEG (8:45 am ET), SWN (A), SYY (?), PFG (a), TSN (B)
May 02: LEND (B), AL (?), AW (a), ACAS (B), AEL (A), ADM (B), ARTG (B), BDN (A), BWNG (B), CLZR (A), CMX (B), CENX (A), CEPH (A), CHTR (08:00 am ET), CBB (B), DNR (?), DUK (B), EXP (A), ECLP (B), EDS (?), EMR (B), ETR (B), EOP (B), FPL (?), GNSS (?), GFI (?), GW (?), HELX (A), HLT (B), HOMS (?), IACI (B), ICE (B), KSU (B), LNC (A), LTR (B), MAS (?), MDG (4:00 pm ET), NBL (?), OKE (A), PDLI (?), PPC (B), PNM (A), PWAV (A), PCP (?), KWK (A), RRD (B), SAFC (B), SIRI (?), SPC (B), STA (B), SBL (?), TGEN (B), THOR (?), TXU (?), VZ (?), VSH (B), VC (B), VNO (B)
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.