Good day! After a bearish close on the 60 minute charts on Friday, the market moved lower out of Monday's open. It continued further out of a 5 minute Bear Flag in the Dow Jones Ind. Ave., stalling at the 10:15 ET reversal period and Friday's lows in the NASDAQ. The NASDAQ managed to break a bit further into the 10:45 ET reversal period to create a 2B reversal going into mid-day. It was a choppy turnover, but the Dow managed to hug the 5 minute 20 sma very well before triggering a buy into 11:30 ET. The rounded lows allowed the pace to pick up and the market was quickly back to morning highs.

This mid-day move was a lot stronger than I originally expected given how strong the prior selling was. It meant that we were not likely to see more selling into the afternoon to new lows, but rather a range intraday that would hold the larger range from the prior couple of days. This was not a huge surprise though, because of that larger daily resistance just overhead that I talked about in yesterday's column.

I was hoping that we would see a solid intraday range near the day's highs going into the close so that we could get a strong upside breakout Tuesday morning. Unfortunately, the market tried to break a bit higher into the early afternoon, taking the NASDAQ to slightly higher highs on the daily chart and bringing the SP500 into price resistance from Thursday and Friday. This made for a much more whippy afternoon session even though we still saw support and resistance levels hold well.

The prior highs in the SP500 led to a pivot with the 14:00 ET reversal period, bringing the market back to the lows of the mid-day base. The pace was strong enough to prevent it from making it back to highs right away. Instead the indices formed 5 minute Avalanches with the 20 sma as resistance. They broke coming out of a short base than normal, however, and were not able to create equal moves in all three indices before finding support at the 30 minute 20 sma in the SP500 and NASDAQ as well as a number of other moving average and price support levels. The market pivoted off the support and picked up speed until stalling at prior highs into the close.

As we head into Tuesday I still think that the market has room to creep higher for a better test of overhead resistance on the daily charts. The 50 day simple moving averages on the NASDAQ and Dow are the next main resistance levels. As such, use caution on shorts.

PENN, long from the 25th or 2nd (depending on what trigger you used), has a target of $35. Trailing stops no lower than a break in $32.00. AAP has continued to make new highs and ASKJ remains of interest. Some stocks to keep an eye on this week are BBI, VAR, ALGN and ADTN long and UNP and CCU short.

Economic Reports and Events
May 10: -
May 11: Trade Balance for Mar (8:30 am), Treasury Budget for Apr (2:00 pm)
May 12: Initial Claims 05/07 (8:30 am), Retail Sales for Apr (8:30 am), Retail Sales ex-auto for Apr (8:30 am)
May 13: Business Inventories for Mar (8:30 am), Export prices ex-ag. For Apr (8:30 am), Import Prices ex-oil for Apr (8:30 am), Mich Sentiment-Prel. For May (9:45 am)
May 16: NY Empire State Index for May (8:30 am)
May 17: Building Permits for Apr (8:30 am), Core PPI for Apr (8:30 am), Housing Starts for Apr (8:30 am), PPI for Apr (8:30 am), Capacity Utilization for Apr (9:15 am), Industrial Production for Apr (9:15 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 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 (?)
May 11: ACXM (A), SIL (?), FD (?), NAPS (?), DIS (A)
May 12: ALTI (?), AEOS (B), ADI (A), DELL (A), DT (02:00 am ET), BIZ (?), EMRG (?), HSP (?), KSS (A), LTXX (A), MOVI (B), NVDA (A), PSUN (?), TGT (B), TLWT (?), URBN (B), WMT (?)
May 13: DPH (06:30 am ET), PBR (?), TIF (B)
May 16: A (A), BGO (A), CNR (?), GG (B), LTD (?), LOW (B), SNDA (A)
May 17: ANF (A), AMAT (4:30 pm ET), BKS (B), BJ (B), BGP (A), DE (B), HPQ (?), HD (B), JCP (?), JWN (A), PNRA (A), SKS (B), SPLS (B)

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.