Good Morning, Traders. Strong day on Thursday, but no increase in overall volume.  Certainly it was one for the bulls, however, with the Dow taking back almost 200, the S&P just over 26, and the Nasdaq almost 60. Internals were strong all day, which is normal on a heavy short covering trading session. Breadth on the NYSE ran 2 to 1 in to the close, while over on the Nasdaq it was an unheard of 14 to 1 positive. Apparently tech issues were being covered in size yesterday. Coal, Miners, and Broker-Dealers were tops on my sector list. Advance decline lines closed up over +1900 on both exchanges, which is rare and notable. When a market is extremely oversold, it's quite common for a large part of the retracement to come in one day. Due to the lack of surge in overall volume, I classify this day as a retracement, or short-covering move, rather than a "follow-through day," which is often the start of a larger uptrend. Going into Friday's trading session, please note the circled areas in the Dow below. They represent prior lows which were major support before the Dow broke down and should now act as resistance into Friday's session. It would not be surprising if we chopped around a bit at these levels due not only to the technical resistance, but also that it's June options expiry. Expecting a rather tight range but as always, trading what we see and not what we think. Traders may want to hold off on initiating positions for swing or position trading until Monday.

Peter Reznicek is the Chief Equity Strategist and a principal of the Prana Fund, a domestic hedge fund, and ShadowTrader, a subsidiary of thinkorswim which provides coaching and education to its clients on both intraday and swing trading of equities. For a free trial to the full version of The Big Picture or to learn about ShadowTrader's other services, visit shadowtrader.net or send an email to preznicek@shadowtrader.net.