Good day! Wednesday was a tough session for the market, beginning with selling in the premarket after news of the latest missile tests out of North Korea. One of the missiles launched has the capability of reaching Alaska or Hawaii and markets in Asia and Europe did not take the news of this far-reaching development lightly. The slower pace on the upside from Monday made it easier for the sellers to take over and news showing increasing private-sector jobs boosted concerns that the Fed may not yet be done with their lengthy stretch of rate hikes. Factory orders also rose in May by 0.7%, ahead of expectations, and the Fed made it clear that upcoming rate moves would be tied to the strength of the economic data. One of the few bastions of strength on the day came in the precious metals, which hit one-month highs.

After opening at 5 minute 200 sma support in the Nasdaq Composite and Dow Jones Ind. Average intraday, the selling that had begun going into the session continued with the 9:45 ET reversal period. The relative weakness of the Nasdaq once more began to show itself as that index sold off more steadily than the stronger Dow until coming into its next support level at the 15 minute 200 sma shown here on the QQQQ. Volume increased somewhat heading into the support to indicate short-term exhaustion, but it remained light as the indices attempted correct off that level, forming a 2-5 minute bear flag into 10:30 ET.

The morning retreat continued until the onset of the 11:00 ET reversal period. This is a common time of the day for a morning trend move to come to an end. The volume picked up for a second time, helping to turn over the selling, but the upside into noon remained guarded. It wasn't until 13:00 that the buying increased in the Dow and S&P 500, although it remained elusive in the Nasdaq.

A third upside move on the 5 minute charts took place out of 14:30 ET. This was the strongest of the three, but the overall pace in the market was not enough to elicit a larger time frame reversal. The uptrend channel gave way coming out of the 15:00 reversal period, creating a rapid wave of selling into 15:30 that took back the majority of the mid-day gains. The Dow ended the session down 76.20 points, while the Nasdaq lost 37.09 points and the S&P 500 fell 9.28 points.

I am a great deal more bearish intraday as we head into Thursday. The light volume on Wednesday's mid-day correction indicated that the majority of those present were unwilling to commit heavily to new longs. The fact that the Nasdaq hugged its 15 minute 200 sma throughout the majority of the session also bodes well for the bears. At present, however, my bearish bias is on an intraday basis only to begin with since the daily Dow and S&P charts still have plenty of room for upside over the next couple of weeks. Most eyes this week will be focused on the end-of-the-week jobs data and how that will reflect economic strength.
 
Economic Reports and Events
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)
July 10: Whoesale Inventories for May (10:00 am), Consumer Credit for May (3:00 pm)
July 11: -
July 12: Trade Balance for May (8:30 am), Crude Inventories 7/7 (10:30 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
July 6: LI (A), TIBX (A)
July 7: -
July 10: AA (?),SCHN (B), SGR (?)
July 11: AMB (A), DNA (A), LPL (3:30 am ET), PBG (B), RI (A)
July 12: AIR (B), FLS (?), GCI (B), INFY (?), PKX (A), RECN (A), TKLC (?)
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.