Good morning! Although the airlines, computer hardware companies and retailers managed to post slight gains on Thursday, the market overall had another rough day. The Dow ones Industrial Average fell 77.32 points, the S&P 500 shed another 8.51 points and the Nasdaq Composite declined 15.48 points by the end of the day. Among the weaker sectors were oil services which lost 2.7%, energy 1.0% and biotechs fell 2.1%. Interestingly, nearly all of that move was made in the last hour of the day.

Overall the market had a very hard time gaining momentum in either direction throughout the majority of Thursday's session. There was some slight upside into the open, but after pulling into the 5 minute 20 sma, the market based along those intraday lows before triggering a sloppy intraday bear flag. The flag then dropped the market into the zone of premarket lows and the prior day's lows, as well as closed the morning gap. As those levels hit shortly after 11:00 ET the indices reacted swiftly to them and pulled back up to perpetuate the 15 minute range that had been in place since the prior afternoon.

The highs of the 15 minute range held over noon, but the market whipped around quite a bit with the 12:00 Philadelphia Fed Index. An initial rapid decline popped quickly back up and the range narrowed dramatically into the early afternoon, indicating that a strong afternoon breakout was likely, although which way that breakout would occur was still up for debate.

I was actually focusing more on a long possibility despite a lot of cons in that direction. The reason was that many times after a week or so of strong downside, the market can often look like it will once more sell off coming out of an extremely narrow range like we saw on Thursday, only to break the other way and rally sharply for the last hour or two of the day. On the con side, however, was that the pace within the range was decidedly bearish. The market continued to have a more difficult time on upside moves within the channel as compared to downside moves and volume on each upside attempt was very weak.

The indices finally made up their minds with the 14:00 ET reversal period when the lower trend channel of the triangle break lower. The initial selling was not dramatic, but after forming a bear flag into 15:00 ET the pace increased. Within a mere 15 minutes the market was making new intraday lows and a very brief continuation pattern out of the 15:30 ET reversal period took the market well past Wednesday's levels.

Just under these levels are the 200 day sma in the S&P 500 and the 100 day sma in the Dow Jones Ind. Ave. These are the next major support levels on the daily charts and look likely to hit on Friday. The pace of the selling is going to continue to hinder the bulls just like it did as the week began, making upside momentum very difficult, particularly in the morning. I am expecting a bit of a retracement off lows on Friday afternoon as we head into the weekend since many short-term traders would typically be more nervous to hold over the weekend following such a move over the last week and a half.

Economic Reports and Events
May 19: -
May 22: -
May 23: -
May 24: Durable Orders for April (8:30 am), New Home Sales for April (10:00 am), Crude Inventories 5/19 (10:30 am)
May 25: Chain Deflator-Prel. for Q1 (8:30 am), GDP-Prel. for Q1 (8:30 am), Initial Claims 5/20 (8:30 am), Existing Home Sales for April (10:00 am), Help-Wanted Index for April (10:00 am)
May 26: Personal Income and Personal Spending for April (8:30 am), Michigan Sentiment-Rev. for May (9:50 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
May 19: ASEI (B), ANN (B)
May 22: CPB (?), FLO (?), LOW (?), TECD (?), PAY (?), WTSLA (A)
May 23: CSC (A), LNUX (A), MDT (A), PVH (A), TOL (?), ZL (A)
May 24: AZO (B), CWTR (A), DLTR (B), JLG (A), MIK (?), NTAP (A), PSS (B), SPI (?), TIVO (A), WSM (B)
May 25: BLI (?), CHS (A), CMOS (?), JOYG (B), PDCO (B), PDC (B), PLMD (B), SAFM (B)
May 26: CBRL (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.