Good day! After a weak close on Thursday, I was looking primarily on the short side on Friday heading into the day, mainly watching for a 15-30 minute base before more downside. Those expectations were quickly quelled with the strong upside gap into the open. It took the indices above 15-minute 20 sma support and the buying continued until hitting the congestion from the prior day when the breakdown first began.

The pace was slightly more gradual as the market pulled in off the resistance, hitting the 5-minute 20 sma support around 10:30 ET. It moves slowly off these levels to start with, but then began to pick up steam. After pausing for a few minutes near the highs of the day, the indices pierced the resistance and continued until hitting equal move resistance on the 5- and 15-minute charts as compared to the rally into the open.

The remainder of the trading day was extremely slow. Volume began to drop off and the market fell into a primarily into a trading range into the close. The Nasdaq made some slightly higher highs out of noon, but nothing significant. It was difficult to find much on the intraday time frames that would yield strong rewards. The session as a whole was basically a continuation of the action that had taken place throughout most of the week. Even though the indices were still heading higher, there hasn't been strong confirmation on any of the upside moves and it's been tough pushing to new highs every day.

Not a lot has changed in terms of the current dynamics of the market. The lack of strong confirmation on the upside moves, punctuated by a lot of choppy trading, leaves the market susceptible to rapid selloffs, such as occurred on Thursday afternoon. Friday ended with a 15.35 point gain in the S&P 500, a 119.27 point gain in the Dow Jones Ind. Ave., and a 39.67 point gain in the Nasdaq Composite. Some stocks I will be watching this week on the long side are FRP, NUVO, ABMD, ASN, MAT, DDR, LYG, CENX, and SRCL. Just be sure to check for earnings on anything you are planning on holding overnight right now since this earnings season has experienced a significant number of strong earnings gaps in both directions.

Economic Reports and Events
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 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
Aug. 2: TFSM, AL, AGN, ALD, AT, ALVR, ADT, ADP, ACLS, ABX, BMRN, BMR, CNQ, CEM, CI, CBB, XEC, CINF, CZN, CLX, CTSH, RIO, CCRT, CNO, ED, DVA, DF, DNR, DVN, EMKR, EQIX, EXTR, GRMN, GSX, GGB, GSF, HL, HOC, HUN, KSU, KFX, LVS, LAZ, LF, MOLX, MCO, MWA, NHP, OGE, PAAS, PGH, PGC, PRU, PSA, PWR, QDEL, RDA, RA, REG, SAFC, SFE, SNY, SGMS, SINA, BID, SM, SBUX, SUN, TWX, TRN, UMC, VPHM, WCG, WLT, WSH
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.