Good day! It was another gloomy day on Wall Street as the major indices continued to feel the pressure from Wednesday's selling. A sizable gap lower took place into the open in the S&P 500, Dow Jones Ind. Ave. and Nasdaq Composite. Larger than average gaps in the indices are more prone to closure the same day than similar gaps in individual securities. The trend channel break on the daily charts was relatively new, however, and the pace was just beginning to pick up on the sellling on the 30 minute charts. Even though the gap did eventually fill in the Nasdaq and S&Ps, it took longer than average to do so.

After opening, the market appeared to be a little stunned and disoriented. The 20 day simple moving average and daily trend channel that had been in place since mid-June had just broken and it seemed to take a moment for that realization to sink in. When the 9:45 ET reversal period hit, however, the bears let loose with another strong wave of selling intraday. At 10:00 am ET the Dow and S&Ps came into support form a few weeks back and the market managed to pivot intraday as volume spiked on the smaller time frames.

The Nasdaq had the best luck with a late morning correction. Although all three indices rallied into 5 minute 20 sma resistance, the Nasdaq managed to surpass it slightly and then fell into a range on top of the moving average. The Dow and S&Ps hugged the lower side of the moving average. As a result, the Nasdaq created the best Phoenix, in the form of a 5 minute cup with handle. It broke higher around 11:30 ET while the S&P made it back to the prior lows intraday for a double bottom.

Although the buying increased out of 12:00 ET, the Dow and S&P saw very little upside action. They simply slid back up the 5 minute 20 sma until hitting the same moving average on the 15 minute charts, which helped turn the market back over into the afternoon. The Nasdaq also hit its congestion level from the prior afternoon at that time. The indices first pulled back into the trend channel, then held it for about 15 minutes before breaking lower just ahead of 13:00 ET.

The afternoon selling was choppy, but steady until the 14:00 ET reversal period. It is common for late day moves to stall at this time, but the indices only formed a small bear flag into the 5 minute 20 sma before continuing lower into 15:00 ET. This time around the reversal period held a little better thanks to stronger price support from the morning Nasdaq lows. The indices fell into a range for the last hour of the day, although the bias remained bearish. All said and done, the Dow ($INDU) lost 166.89 points on the day (-1.5%), the S&P 500 ($SPX) lost 16.31 points (-1.3%), and the Nasdaq Comp. ($COMPX) fell 36.13 points (-1.7%) by the close.

I am still looking for more selling into Friday, but I expect that to slow heading into next week. It is extremely rare for an intraday trend move to progress for more than three days in a row without correcting to a point whereby the 15 minute 20 sma is broken. We now have seen two days of such action. In fact, I cannot recall any exceptions to this pattern of intraday trend development, although sometimes it may be broken on day four only to resume the prior trend once more.

Economic Reports and Events
July 14: Business Inventories for May (8:30 am), Export Prices ex-ag for June (8:30 am), Import Prices ex-oil for June (8:30 am), Retail Sales for June (8:30 am), Michigan Sentiment - prel. for July (9:50 am), Business Inventories for May (10:00 am)
July 17: NY Empire State Index for July (8:30 am), Capacity Utilization for June (9:15 am), Industrial Production for June (9:15 am)
July 18: Core PPI and PPI for June (8:30 am), Net Foreign Purchases for May (9:00 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 14: FNFG (B), GE (?), RF (B)
July 17: C (B), CBH (B), CCK (A), ETN (B), TV (A), HDI (B), MAT (?), NBIX (A), NVS (B), PHG (?), GWW (B)
July 18: ADTN (?), AMTD (?), ASO (B), CHKP (A), CNW (A), CSX (A), DTAS (A), FDG (?), ILMN (A), IBM (?), KEY (B), MER (?), MTG (B), NBB (B), PKG (A), STT (B), KO (B), NYT (B), USB (B), UTX (B), WFC (B), YHOO (?)
July 19: ABT (?), ADS (?), DOX (?), ASD (?), APH (?), AMR (?), AAPL (A), ASML (?). AZR (A), BAC (?), BCR (A), CDWC (B), CIT (B), CBSS (?), CBST (A), ET (A), EBAY (?), EFII (A), FHN (A), FLIR (B), GD (B), GPC (B), HST (B), INTC (A), ISIL (A), JPM (B), JNPR (A), KEA (?), NITE (B), LRW (A), LRCX (?), MAN (B), MEL (B), MOGN (A), MGI (?), MOT (A), NTRS (?), NVLS (?), JNC (B), NVEC (?), PNC (?), PLCM (?), QCOM (A), RDN (A), RMBS (?), RYL (B), SSTI (?), LUV (B), STJ (B), STI (B), SWFT (?), SNV (?), TER (A), ALL (A), BK (B), TMK (A), UIS (B), UNH (B), WM (A), YUM (A)
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.