Good day! Market activity remains light as we head into the final trading day of this shortened week of holiday trading. Around 1.4 billion shares traded on the NYSE with 1.63 billion on the Nasdaq. This is significantly under the recent average. A lot of anticipation has centered upon Friday's jobs data, due out at 8:30 am ET. Over the past year or so, and particularly in the last couple of months, many traders have been latching onto these data releases to provide guidance for potential rate changes by the Fed. The consensus is that most market participants are hoping for weak data since it would be the most likely to cause the Fed to finally break the solid quarter-point rate hike trend.

The market opened slightly higher on Thursday, showing very little reaction to the initial jobless claims data. Instead of increasing as expected, first-time filings for state unemployment benefits actually fell 2,000 to 313,000 last week. Last prior week's estimate, however, was revised higher by 2,000, smoothing the average.

At 10:00 am ET the ISM data hit. According to the Institute for Supply Management, the nonmanufacturing segment of the U.S. economy slowed in June. The index following this segment fell to 57% off May's 60.1% level. This was quite a bit more than the anticipated 59.6%. The report didn't offer enough for many economists to feel that it indicated a new trend as opposed to an aberration that can easily be corrected next month, but it was enough to continue the rally that began with a bit of upside into the open.

The Dow Jones Ind. Ave. far out-stripped the rest of the market thanks to Altria (MO). The Florida Supreme Court threw out an award of $145 billion as part of a class-action suit against cigarette makers. This led to a substantial divergence between the three major indices that lasted throughout the session. The Nasdaq Comp. vastly underperformed the rest of the market, only putting in one small rally into 10:30 ET as opposed to the continued upside experienced by the S&Ps and Dow into about 11:15 ET.

The S&P 500, Dow Jones Ind. Ave. and Nasdaq Comp. all finally began to turn back over shortly ahead of noon. The Nasdaq formed a 5 minute Avalanche by pulling swiftly off highs and hugging the 5 minute 20 simple moving average support. It triggered a short once that support gave way. The S&P 500 formed a type of double top, called a 2T, in which the second high is only slightly above the first, creating a type of bull trap pattern. The stronger Dow did not have a 5 minute short setup, but it also formed a small Avalanche, although in that index it came on a 1 and 2 minute chart as opposed to the 5 minute one.

The selling that hit mid-day continued well into the afternoon. After making it back into support from prior lows intraday, the market formed a longer correction from around 12:30 to 14:00 ET. At that time the volume remained light and the market inched higher at a much slower pace than the prior decline. This continued the bearish bias and led to another 5 minute decline into 14:30 ET. These can be seen as Avalanche patterns along the 15 minute 20 sma as well.

Despite the longer downtrend versus uptrend intraday, the indices still managed a positive close. The Dow gained 73.48 points (+0,7%), while the S&P 500 rose 3.17 points (0.2%). The weaker Nasdaq only rose 1.75 points (+0.1%).

The market is poised to capitalize on a move either way coming out of the Friday morning data. There is not a strong intraday or daily bias based on Thursday's closing action since the 15-30 minute charts are just consolidating with fairly similar upside versus downside pace as a whole. As a result, I am not looking at much going into the day, but will instead hold off until after the data and use that momentum to focus on daytrades ahead of the weekend.
 
Economic Reports and Events
July 7: Average Workweek, Hourly Earnings, Nonfarm Payrolls and Unemployment Rate for June (8:30 am)
July 10: Wholesale 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 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.