Good day! I found Tuesday's session to be a very nice one for daytrade and scalp setups in individual stocks, but a rather difficult one for the market as a whole. While a lot of the opening gainers had nice upside breakout patterns in the morning, the indices overall were very very choppy with a great deal of back and forth action with a narrow range to start the day. This came after a substantial downside gap which nixed chances for a better test of the daily resistance zone. The gap was enough to take the market back to the lows of the range from the prior couple of days and this is what helped create the choppy morning trading since Monday had ended near the highs of the range.

After a great deal of steady premarket selling, the market was looking like it wanted to put in a longer correction over noon on Tuesday. At about 11:15 I started watching the 5 minute charts for a Phoenix (in the form of a Cup with Handle) along the 5 minute 20 sma. Volume was dropping steadily and the market was hugging that resistance quite well, creating potential for it to break higher. The pace within the base along the moving average never managed to turn over to favor the bulls, however, and downside pace within the range was stronger than upside pace, leading to a breakdown into the 12:00 ET reversal period.

The correction out of the noon reversal period was about average. It put in three waves of buying on the 2 minute charts before hitting resistance at morning highs in the SP500, as well as its 5 minute 200 sma. This stalled the market and since the pace was neither extremely rapid nor extremely gradual into the 13:30 ET zone highs, the market could go either way into the close. It just depended on how the correction off those highs reacted to the 5 and 15 minute 20 sma support. As long as it held, it could bounce and form a longer range for an upside breakout into the close. The market was unable to turnover the initial downside pace to a more gradual one within a range though and hugged the support instead. This broke at about 14:30 ET, leading to a very strong wave of selling before the market rounded off again coming out of the 15:00 ET reversal period and going into the close.

While support and resistance levels held pretty well, it wasn't much of a technical pattern day in the market. I don't have a strong bias for Wednesday, but the market is likely to want to correct more to the late day drop from yesterday afternoon. The market had put in an equal move on the 30 minute charts into the close as compared to the gap breakdown from the open. This is typically met with a correction that is comparable in length to the base or pullback between trend moves. A larger trading range on the daily charts is also quite possible since the market is now stuck between daily support and resistance levels such as the moving averages shown on the charts here.

PENN, long from the 25th or 2nd (depending on what trigger you used), has a target of $35. It made new highs on Tuesday at $33.94. Trailing stops no lower than a break in $32.50. 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. ALGN, UNP and CCU have all broken already. ALGN target is $10 while UNP has support at $62 and CCU has support at $30.

Economic Reports and Events
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 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.