Good day! The market continued its back and forth action of one day down followed by another day up as last week wound to a close. As with nearly every other day of the week, Friday began with a gap. This time it was a gap higher, right into the 5 minute 200 sma resistance in the NASDAQ. The 30 minute 20 sma also helped hold the market in at the start of the day and selling hit right away. After breaking the 5 minute 20 sma the pace picked up, stalling only for about 15 minutes as the gap closed before plummeting into prior lows in the SP500 and Dow Jones. A strong volume spike into the support with the 10:45 ET reversal period stalled the move and the market began to move higher off lows.

This exhaustion move in the morning created the double bottom on the daily charts in the SP500 and Dow Jones Industrial Average that we were watching out for heading into the day. The initial move off the lows was rather strong given the extent of the drop. This created Phoenix potential heading into mid-day. The pattern took a lot longer to form than usual, but the NASDAQ really hugged the 5 minute 20 sma as volume dropped into 12:30 ET when the gradual correction broke higher to trigger a long. This pattern followed through into the 5 minute 200 sma and morning highs in the SP500, as well as equal move resistance as compared to the initial 10:45 ET move higher off lows.

Once again, as resistance hit, the market pulled back rather quickly. This meant that a triangle was more likely than a bull flag. The pattern was also less than perfect, pulling higher at a more gradual pace off the 5 minute 20 sma before only stalling briefly at 14:00 before breaking out of the triangle. This was unusual in that the market pace within the range never turned over and the second high within the triangle was made very close to the breakout on a third test of highs. Typically you will see a bit more correction off the second pivot within the triangle before it breaks. The move was strong, nevertheless, and took the NASDAQ into morning highs and the SP500 and Dow into their 15 minute 200 sma resistance going into the 15:00 ET reversal period.

After three waves of buying, the market was pretty exhausted heading into the last hour of the day. At best I figured we'd hold a range into the close. This was true in the NASDAQ, but the SP500 and Dow inched slightly higher just before the closing bell, still holding the resistance from prior highs, but testing it more strongly.

Going into the new week, I think we'll see a bit of upside as the market continues to correct to the double bottom, but an intraday reprieve after Friday's rally would be typical. I scanned for a couple of hours for new swingtrade positions, but nothing really stood out so I'll be focusing mainly on daytrades for the time being.

WLT and YELL, swingtrade shorts from last week, are both basing at lows on the 60 minute charts. Trailing stops should be used at this point. On the upside, PENN needs to hold last week's lows.  AAP is doing well as a position trade and ASKJ is still of interest but needs to see the pace within the daily range turn over since the downside is too strong at present for a strong upside breakout..

Economic Reports and Events
May 02: Construction Spending for Mar (10:00 am), ISM Index for Apr (10:00 am)
May 03: Factory Orders for Mar (10:00 am), Auto Sales for Apr (12:00 am), Truck Sales for Apr (12:00 am), FOMC policy announcement (2:15 pm)
May 04: ISM Services for Apr (10:00 am)
May 05: Initial Claims 04/30 (8:30 am), Productivity-Prel. for Q1 (8:30 am)
May 06: Average Workweek for Apr (8:30 am), Hourly earnings for Apr (8:30 am), Nonfarm Payrolls for Apr (8:30 am), Unemployment Rate for Apr (8:30 am), Consumer Credit for Mar (3:00 pm)
May 09: Wholesale Inventories 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
May 02: AVP (?), CECO (A), CTIC (?), CHK (A), CTV (A), ECLP (B), GGP (A), GLG (?), HUM (05:00 am ET), OSIP (A), PKD (B), POG (A), PRTL (?), RT (A), SYY (B), TNE (B), DTV (B), PFG (A), TSN (B), UPCS (A), WCI (B)
May 03: ACAS (A), AFR (B), AOC (A), ARM (B), BRKS (A), CMX (?), CEPH (A), CHTR (B), CBB (B), CZN (B), CVH (B), EMR (B), GGB (B), HNT (B), IDTI (?), LVS (?), LOUD (?), MACR (A), MMC (B), MAS (?), MXIM (A), MBI (?), MET (A), PKZ (?), PXD (B), KWK (A), RNR (A), SWY (?), SKE (?), STA (B), SBL (A), TLM (?), TKLC (A), THC (B), TERN (A), RIG (B), TRN (A), TYC (B), UNTD (A), UNM (A), VRTS (?), VSH (B)
May 04: APCS (A), ALVR (B), ABV (A), APPX (?), AMT (B), AMKR (A), ADRX (A), ANPI (?), AQNT (?), ILA (B), ACLS (A), BEC (B), BEV (B), ÇDIS (A), CNQ (B), CI (B), XEC (B), CMS (B), CREO (A), DF (B), DVN (B), D (B), DUK (B), EXPD (A), FRP (B), FBR (A), GPRO (A), GNSS (A), HL (B), HUN (B), INCY (B), IACI (B), KEM (A), LAMR (B), MXO (A), NBL (B), PCG (?), PWER (B), PRU (A), PEG (B), QLGC (A), QSFT (A), RNWK (?), PKS (A), SYMC (?), TWX (B), TOT (?), UVN (A), VCLK (A), WON (?), WFMI (A), ZBRA (B)
May 05: ATVI (A), AES (B), ANR (?), AIV (B), BRL (B), BBI (?), BWNR (B), CVC (B), CPT (A), CLX (?), CPWR (A), CNO (B), CEI (B), CVS (B), DLTR (B), DISH (?), ENZN (B), FLR (A), FLYI  (?), FTO (B), GMST (A), GSF (?), HRP (B), ICOS (?), JNY (?), MFE (4:30 pm ET), MCK (A), NEW (B), PXP (?), PPL (?), PRM (B), ROIAK (B), RRI (B), RRD (B), TSG (B), SGMS (A), SINA (A), SUN (B), SCON (A), G (B), PMI (?), THE (B), TXU (B), VRX (?), VPI (A), WPI (A), WMB (B)
May 06: ASTM (?), NOV (B), OATS (B)
May 09: AL (?), CRAY (?), DCEL (A), DYN (B), FSH (A), FTI (A), GNTA (?), IIP (?), MEDX (?), PCLN (A), PVX (B), SONS (?), TSO (?)
May 10: ANR (B), ASYT (A), CE (?), CQB (B), CSCO (A), EAGL (B), KFX (?), MDG (A), MSSN (B), MYGN (B), NPSP (?), NTLI (02:00 am ET), SRP (B), MAY (?)

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.