Good day! The indices have continued to correct to the selloff heading into the month with another day of upside on Monday within a larger trading range on the daily charts. Positive earnings from Merck (MRK +4.3%), Pfizer (PFE +4%), and Schering-Plough (SGP +5.7%) helped out, but the oil services, energy stocks, internet stocks, networkers, retailers, biotechs, transportation stocks and brokers all managed to compile respective gains of more than 2% on the day. In the end, the Nasdaq Composite rallied 2.1% (+41.45 $COMPX), while the Dow Jones Ind. Ave. and S&P 500 both added 1.7% (+182.67 $INDU, +20.62 $SPX).

Also in the news on Monday were talks out of the Middle East regarding a potential cease fire between Israel and Lebanon, which remains a hot spot. Additionally, the quarterly earnings season is now in full swing and a round of mergers and acquisitions keep things exciting. Among the most highly talked about are AMD's buyout of ATYT, while HCA has confirmed plans to go private in the largest leveraged buyout on record.

The morning began on an up beat with a decent gap higher out of Friday afternoon's trading range. This began the longer correction we were looking for heading into the day. Instead of holding resistance, which would have been necessary to facilitate continued selling later in the session, the pace of the buying continued strongly for the first 15 minutes of the day and then corrected with a slow base/pullback off the Dow's 5 minute 200 sma resistance. This intraday retracement lasted until the 10:15 ET reversal period, at which point the buyers again took over. The momentum surged and the rally remained strong throughout the remainder of the morning.

It wasn't until the indices began to run into price resistance from last Thursday's congestion that the buying finally subsided. The pace on the upside remained above average into noon and this prevented the indices from selling off quickly mid-day. The Nasdaq saw the most downside after pulling back the quickest into its 5 minute 20 sma. At that point it hugged the support level, forming an Avalanche (or right shoulder of a head and shoulders pattern) that triggered a short around 12:30 ET. Although both the S&Ps and Dow also based along this 5 minute support zone, the pace of the upside momentum had declined more quickly in the Nasdaq than in the other two, allowing for a more rapid pullback into the 15 minute 20 sma support.

All three indices held the 15 minute 20 sma very well. The momentum once again turned over to favor the bulls as the selling pace slowed and a light volume pullback into 14:30 created a strong 5 minute buy setup heading into the last 90 minutes of the day. The afternoon rally lasted for another hour until the S&Ps retested last week's highs going into the 15:30 ET reversal period.

The market is going to remain at the whim of news and earnings this week and it will  be more difficult to sustain a bias from one session to the next. While there is still a little room left into the morning on Tuesday for continued buying intraday, there is also a great deal of overhead resistance in the form of moving averages on the daily charts and price congestion and resistance from the last couple of weeks that will likely keep the bulls in check. I am locating relatively few stocks with new swingtrade setups at this time, so I'll continue to focus primarily intraday on news stocks.

Economic Reports and Events
July 25: Consumer Confidence for July (10:00 am), Existing Home Sales for June (10:00 am)
July 26: Crude Inventories 7/21 (10:30 am), Fed's Beige Book (2:00 pm)
July 27: Durable Orders for June (8:30 am), Initial Claims 7/22 (8:30 am), Help-Wanted Index for June (10:00 am), New Home Sales for June (10:00 am)
July 28: Chain Deflator-Adv. for Q2 (8:30 am), Employment Cost Index for Q2 (8:30 am), GDP-Adv. for Q2 (8:30 am), Mich. Sentiment-Rev. for July (9:50 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.
July 25: MMM, ACE, AFL, AGR, AKS, ALK, MO, AMZN, ABC, ASN, ARW, ARTG, T, ATML, AUO, AVY, AN, BJS, BYD, BP, BMHC, BNI, CHRW, CP, CNC, CHE, CME, CB, CL, CYMI, DADE, DBD, DGIN, DOV, ECL, ECA, WIRE, ESV, EZPW, FISV, FSH, FLEX, FRK, FTI, FDRY, BGC, GYI, HMA, HOLX, IM, IDTI, ININ, IPS, JEC, JBLU, KIM, LH, LM, LSCC, LCAV, LVLT, LXK, LLTC, LMT, MCD, MDCO, MDG, MUR, OMM, OMC, OXPS, PNRA, PNR, PLT, PPP, PWER, PCP, QLGC, RYN, RBAK, RFMD, RHI, ROH, RDC, SCSS, SIAL, SGTL, SIRF, SII, STMP, STN, STM, SUNW, MHP, SWK, SWTI, STAI, TRMB, TUES, UPS, X, BER, WAB, WDR, WAT, WBSN, WY, WHR, WHR, WLL, WWY, XRX, XTO
July 26: ABY, ACXM, AMG, AEM, APD, AKAM, ATI, ABK, AMX, AHM, AGP, ASCA, AMKR, NUD, APAC, APPB, ARRS, ASH, ASPV, ATMI, AVB, AVX, BIDU, BEAV, BIIB, BSTE, BDK, BOBJ, CDNS, CRS, CBR, CRUS, CLF, CTV, BVN, COP, DVN, CYTC, XRAY, DDR, DO, DRE, ESRX, FILE, FCL, FBN, GDI, GM, GSK, HLIT, HRS, HPC, HES, BLUD, ICE, ISRG, JNY, JLL, KTO, KEM, KMT, KMB, KOMG, LIZ, LSS, LPX, LSI, LU, MTW, MSO, MTSN, WFR, MTH, MCRL, MIL, MNST, MYL, NABI, NETL, NYB, NSC, NVTL, ORLY, OI, PFCB, PD, PLXS, PX, PSYS, PHM, STR, RADS, RAI, ROK, COL, RES, SFNT, SCUR, SIMG, SMDI, SKX, SMSI, SSCC, SNA, SNWL, STTS, SVU, SYMC, TASR, TMX, TIN, BA, FAF, TBL, TMO, TSCO, TRID, TQNT, TTMI, UARM, UNT, VAR, WOOF, VRTX, WEBX, WLP, XL, ZBRA, ZMH
July 27: ARDI, AET, AAI, ALA, AYE, AEP, AMMD, APCC, APC, ANDW, AU, APA, AN, BLL, BZH, BBI, BWA, BSX, BOW, BMY, BC, BG, CCJ, CLDN, CRA, CELG, CENX, CTL, CF, CHK, CCE, CNXT, CNX, CVG, CAM, CMI, DCX, DLX, DENN, DRH, DTE, EMN, ECIL, EQ, EQT, XOM, FORM, FO, BEN, FBR, GMT, GNSS, GNW, GGC, GR, HAE, HC, HET, HIG, HW, HP, HSIC, IKN, HDE, ICO, ISE, SFI, ESI, JNS, K, KLAC, KLIC, LLL, LIFC, LPNT, LYO, MEE, MBI, MFE, MCK, MSCC, MLNM, MHK, MRH, MPS, NOV, NWL, NFX, NEM, NIHD, NOC, ODFL, OLN, OCR, ONNN, OSI, PMTI, PNP, PENN, PKI, PLUG, POT, PDS, PLD, RACK, RRC, RJF, RACK, RNWK, ROP, RCL, R, STD, SI, SWIR, SIVB, SOHU, SNE, SO, SPF, HOT, SPN, TLM, TNE, TLAB, TEN, TEX, DOW, THQI, TDW, UCBH, LCC, UST, VSEA, WHQ, GRA, WEBM, WDC, WITS, XMSR, YRCW
July 28: ALE, AXL, ANDE, ATW, BHI, BDX, BLC, CVX, CEG, CVH, FPL, GPN, IR, ITT, LEA, HCR, ODP, OS, OSTK, SCG, SRP, SSD, TE, WMI
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.