Good day!  Thursday began with a strong upside move into the open, gapping up past the prior day's highs. The move took place ahead of the 8:30 am economic data, but the news certainly didn't hurt matters. First-quarter gross domestic product was revised to a final number showing a 5.6% increase. This is the strongest rate of growth in nearly three years and beat expectations by 0.1%, although this is now expected to slow over the next several quarters. Core consumer-price inflation rose at a 2% annual rate for the first quarter, down 0.4% from Q4 of last year.

The rally continued out of the 9:45 ET reversal period, taking the indices to new intraday highs, but stalled following the release of the 10:00 am initial jobless claims. Last week's claims rose by 4,000 to 313,000, although the four-week average of new claims dropped to their lowest level since Feb. 25th. Volume was light on this pullback and the indices held the upper portion of the day's range, making it easier to move up once more out of the 10:45 ET reversal period. The Nasdaq Composite had the greatest correction from highs and hence the weakest reaction to the support.

The Dow saw the greatest momentum into lunch, while the Nasdaq was unable to breach prior highs. Instead it formed a type of double top called a 2T, whereby the index hit new highs by a tick or two at a slower pace than the prior upside move intraday, hugging the 5 minute 20 sma and trapping bulls who used that as a trigger to buy. The result was a stronger mid-day correction than seen in the Dow Jones Industrial Average and S&P 500, although all three pulled back. This correction continued into the early afternoon with volume declining as expected ahead of the Fed.

The 13:00 ET reversal period held well, pulling the indices into 5 minute 20 sma resistance. At that point they based, creating a 5 minute Phoenix pattern by hugging the resistance into the 14:00 ET reversal period. Despite the upcoming Fed, it broke higher for a little surge before the 14:15 ET announcement. As expected, the Fed raised overnight rates another 0.25% to 5.25%. They gave the market a boost by changing their wording in their accompanying statement, removing the phrase suggesting that further rate hikes "may" be needed and instead saying that additional "firming" will depend on the economic outlook. Clearly, the market took this well.

The indices soared out of 14:15 ET. The initial one minute rally corrected through a base and then a third move that was again to the upside. This completed one wave on the 5 minute charts, which then repeated the 1 minute reaction. The second wave was a bit stronger, pulling back a little more, but the third wave was once again a bullish move. It was not as rapid as the first, but after slowing into 15:00 ET, it continued into the close. By the end of the day the Dow had gained 217.24 points, the S&P 500 was up 26.87 points and the Nasdaq Comp. rallied 62.54 points (3%) for the largest single day rally since March of 2003.

Strong support on the weekly and monthly charts will help hold up the indices in coming weeks after hitting lows on the 13th and 14th of this month. It's difficult to sustain momentum of the same caliber was Thursday afternoon, however, so we should see some corrective action on Friday as we end the quarter. It is also likely that we will see a lot more intraday pivots and reversals on the smaller 2-5 minutes charts as a part of that correction.
 
Economic Reports and Events
June 30: Personal Income and Personal Spending for May (8:30 am), Michigan Sentiment-Rev. for June (9:50 am), Chicago PMI for June (10:00 am)
July 3: Construction Spending for May (10:00 am), ISM Index for June (10:00 am)
July 5: Auto and Truck Sales for June (12:00 am), Factory Orders for May (10:00 am), Crude Inventories 6/30 (10:30 am)
July 6: Initial Claims 7/01 (8:30 am), ISM Services for June (10:00 am)
July 7: Average Workweek, Hourly Earnings, Nonfarm Payrolls and Unemployment Rate for June (8:30 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
June 30: -
July 03: -
July 04: -
July 05: -
July 06: LI (A), TIBX (A)
July 07: -
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.