Good day! The market continued to inch higher on Wednesday after selling off sharply earlier this month, but a strong gap down and a late day reversal left the indices in slightly negative territory by the end of the session. The Dow Jones Ind. Ave. closed lower by 1.20 points at 11,102.51. The S&P 500 lost a mere 0.48 of a point, ending the day at 1,268.40. The Nasdaq Composite had a bit more of a difficult time, losing 3.44 points to wrap up the session at 2,070.46.

AMZN was one of the largest losers on the day, falling 21.8% after announcing significantly lower second-quarter profit. GLW also faired poorly despite a higher Q2 profit, due to lowering the forecast for the third quarter. It lost 14.5% by the close. SIRF, PNRA, ISRG and DGIN also posted strong losses on the day.  The weakest sectors were internet stocks, airlines, retailers and transportation stocks.

The oil and energy sectors continued to outperform on Wednesday, following up on our expectations heading into the session. Just a few of the stocks included in this rally were RIG, DVN, DO, NOV, OXY, SUN and XTO. Other top gainers were AMZN, AMGN, IDTI, BEAV and FILE. In addition to the oil and energy sectors, networkers, semiconductors, computer hardware and biotech stocks also ended the session higher.

Wednesday began on a negative note by gapping under the 5 minute 20 sma intraday. That served as resistance and the market sold off throughout the morning, particularly in the Nasdaq, which didn't put in a low until 10:45 ET when it hit the prior day's lows and the 5 minute 200 sma support. The Dow and S&P both held the earlier reversal period lows at 10:15 ET, but turned over slowly, not picking up momentum until the Nasdaq came around. All three indices then broke higher and the Dow and S&Ps made it back into morning highs before the market formed a 5 minute bull flag along the 5 minute 20 sma support. This triggered heading into the 12:00 ET reversal period and quickly led to a closure of the morning gap.

When a gap closes, that price serves as resistance. On Wednesday it led to a larger pullback into the earlier afternoon. Although the 5 minute 20 sma held once again, the pace did not pick up again until about 13:45 ET. The Nasdaq came into the prior day's highs at that time, but things began to get a little crazy with the 2:00 Fed Beige Book. Speculation is still widespread regarding upcoming rate hikes, but many viewed the news on Wednesday as positive for an end to the steady climb in rates.

A great deal of chop took place after this data, but each time the bulls tried to gain a lead, they failed to follow through. This left me with a strong bearish bias heading into the last hour of the day. The initial reversal continued with a 5 minute Avalanche along the 20 sma support. It was this late day turn around that once again took the indices into negative territory. It is likely that this type of action over the last couple of day, whereby the market is making some larger swings back and forth on the 15 minute charts, is going to continue into Thursday.

Economic Reports and Events
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)
July 31: Chicago PMI for July (10:00 am)
Aug. 1: Auto Sales and Truck Sales for July (12:00), Personal Income and Personal Spending for June (8:30 am), Construction Spending for June (10:00 am), ISM Index for July (10:00 am)
Aug. 2: Crude Inventories for 7/28 (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.
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
July 31: AFFX, AG, ALO, ATRS, ARM, AVP, GPRO, GLG, HUM, ISSX, KCI, MET, MTU, NLS, PYX, PWAV, RGC, RNR, SPG, STO, PFG, THOR, TP, TSN, UDR, VMC, WFMI
Aug. 1: ADPT, MDRX, ANR, ACAS, AQNT, ITU, CKFR, COH, CDE, CSC, CEI, DPL, EK, ELN, ERTS, EDS, EMR, ENZN, EOG, EOP, EQR, EXPD, FE, FWR, GW, GPI, GTRC, HLT, IINT, IACI, IP, JCOM, MVSN, MRO, MAS, MIG, MWV, TAP, NLC, NRG, NSS, OSK, PKD, PH, PPC, PDE, PEG, KWK, Q, RRD, SIRI, SWN, SBL, TX, TSRA, MOS, SVM, JOE, TWTC, TXU, UPL, VLO, VCLK, VZ, VSH, VC, VNO, XEL
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.