Good morning! I've been a bit under the weather so I haven't followed the market as closely as usual this week so far, but the market had a pretty decent day on Tuesday. It began with a gap lower into the open, right into price support on the 5 minute charts from prior lows as well as the 15 minute 20 sma. This stalled the selling enough to create a gradual move higher into resistance at the 5 minute 20 sma as the general gap zone closed. The market pivoted off this 10:00 ET resistance and the indices sold off strongly into the 5 minute 200 sma intraday in the NASDAQ, as well as the SP500.

Going into the day, I was expecting the correction off Friday's lows in the SP500 and Dow to continue. This support intraday, which was also an equal move support zone on the 5 minute charts, served as lows on the day and was followed by a number of 5 minute buy setups going into the afternoon. After pivoting off the support the indices formed a small Phoenix on the 2-5 minute charts between 11-11:30 ET that led the market back to morning highs and price resistance. From there the market sold off very gradually into the 13:00 reversal period on light volume.

The light volume back into support with the reversal period all led to a pivot higher into the early afternoon. It led into another Phoenix in the form of a Cup with Handle on the 5 minute charts that triggered coming out of the 14:00 ET reversal period. The follow through was a bit slow at first due to resistance at morning highs, but by 14:30 ET it picked up dramatically, triggering a breakout on the 15 and 30 minute charts. The day ended as the breakout continued with a smaller 5 minute Bull Flag into the last half hour of the day that took the NASDAQ back into its 200 day sma resistance where it closed.

As a result of the pick up in volume on Tuesday's afternoon breakout, it is likely that we continue to see strength into Wednesday morning. The 100 day sma in the SP500 and NASDAQ will serve as the next main resistance. We are a bit extended intraday, however, so upside out of the open is likely to stall by 11:00 ET before putting in a larger correction on the 15-30 minute charts.

AAP from the $51.88 zone on the 25th is correcting a bit on the daily after two strong weeks. Highs of $55.44. Trailing stop hit for swingtrades. 50 day sma is support for position trade. May 18th earnings. ASKJ long remains of interest. From last week, BBI long is also still of interest. VAR, ALGN and ADTN long all have broken out. VAR and ADTN as short term trades have hit trailing stops and have 20 day sma support for longer term. ALGN remains range bound. It needs to hold Monday's lows. UNP and CCU shorts have hit trailing stops.

Economic Reports and Events
May 18:  Core CPI for Apr (8:30 am), CPI for Apr (8:30 am)
May 19: Initial Claims 05/14 (8:30 am), Leading Indicators for Apr (10:00 am), Philadelphia Fed for May (12:00 pm)
May 20: -
May 23: -
May 24: FOMC Minutes (2:00 pm)

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 stocks' earnings dates 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
May 18: AAP (A), BEAS (?), POS (B), FL (A), HOTT (4:00 pm ET), INTU (A), PETM (?), PLAB (?), ROST (08:00 am ET), CRM (A), SNPS (A), TLB (?)
May 19: ARO (A), ALKS (A), ANN (B), ADSK (A), BPUR (B), BRCD (A), CBRL (B), CHRS (A), CHINA (B), CLE (06:00 am ET), GPS (A), SYNC (A), MRVL (A), OPSW (A), PSS (?), SRNA (A), PLCE (B)
May 23: CPB (?)
May 24: CSC (A), GME (B), NTAP (A), SEAC (A), VOD (?), WSM (?)

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.