Good day! Although the stock market initially rallied out of Friday's jobs data, which showed a slowing pace in job growth, they turned around quickly ahead of the open. While job growth was weaker than expected for last month, with a 121,000 increase, April and May data was revised higher by 3,000. The unemployment rate held steady at 4.6%. The weak data sparked hopes that the Federal Reserve would stop raising interest rates.  Enthusiasm was dampened, however, by a greater-than-expected increase in hourly earnings (+8 cents) and a revenue warning from Advanced Micro Devices (AMD).

Coming at the end of a light trading week, the market didn't seem to know quite what to do when faced with the sharply lower open. MMM, BOBJ and SBUX among the other top names opening significantly lower on news. For the Dow Jones Ind. Ave. ($INDU), there was simply too much pressure. It quickly took the lead as the weakest of the three major indices and would help guide the market lower as the day progressed, eventually closing down by 134.63 points (1.2%) while the S&P 500 ($SPX) lost 8.60 points (0.7%) and the Nasdaq Composite ($COMPX) fell 25.03 points (1.2%).

Although the end results on the day were comparable for both the Dow and Nasdaq in terms of percentage declines, it was the action between the open and the close that distinguished the Dow. The morning was very range-bound following the initial gap in the indices. Bias within the range was non-committal to start with. In the Dow there was greater weakness into 11:00, indicating a greater likelihood of a downside resolution to the range. The Nasdaq, on the other hand, was a lot stronger on its upside moves versus downside moves within the range, making it more difficult for it to form a breakdown pattern. Instead, it would need another upside move to help turn the pace over to allow for further selling.

This upside flush in the Nasdaq was strong than I was initially expecting, popping sharply out of 11:20 ET with a bit of an increased in volume. This brought the index into resistance from the prior day's lows, at which point it formed a small bull flag on the 5 minute charts along the 15 minute 20 simple moving average. The flag triggered out of 12:30 ET and the morning gap soon closed as the index ran right smack into its 5 minute 200 sma and price resistance from the prior two days  This brought an end to the mid-day reversal.

While the Nasdaq rallied, the Dow continued to hold its range. Although the S&P 500 took a similar route as the Nasdaq, it was unable to show as much follow through. Part of this was due to the stronger open in the S&Ps, which left less room before running into a lot of overhead resistance. While the Nasdaq pivoted off its price and moving average resistance, the S&P 500 also formed a reversal pattern off its highs in the form of a double top called a 2B (shown on the 5 min. ES), in which a slightly higher high serves as a trap. All three indices were once again heading lower by 13:00 ET.

The market hit support at 13:15 ET when the Dow and S&Ps came into their 15 minute 200 sma levels. The Nasdaq also found support from morning congestion and the S&P from morning lows. The steep decline kept the market from bouncing back strongly off the lows, but the support was enough to pull the indices into the 5 minute 20 sma. The volume dropped off as the indices moved very gradually higher into that resistance zone. This created a strong short pattern that triggered into 14:30 and led to a steep decline into the 15:00 reversal period. After dropping to put in an equal move as compared to the 12:45 ET descent, the selling slowed, although it did not pivot as well as before. Instead the market formed rounded lows that continued into the close.

I spent the majority of Sunday scanning and was not thrilled with the results. Although my initial lists were quite long for both long and short setups, most of the longs were at resistance on the larger time frames and need more time to correct and most of the shorts are at support and need longer to correct before giving a decent trigger. This didn't leave me with a lot of very strong options and makes me want to hold with my less aggressive stance. Some of the names I'll be watching on the daily charts over the next week or two are FPL, SPN, LRY, PNM, UTIW, and PEG long; FDO, AET, PLXS, WLSC, FBN, KLAC and FAF.

Economic Reports and Events
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 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 (?)
July 13: CTAS (A), FLE (B), MAR (B), NXY (?), PEP (B), TXI (?), TRB (B), VCP (B)
July 14: FNFG (B), GE (?), RF (B)
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.