Good day! The market took a bit of a beating on Tuesday, breaking sharply lower as anticipated coming out of Monday's extremely narrow range. The gap led to an open that was well under the prior day's lows. This also meant that it was under a lot of the short term support levels. The selling continued for the first few minutes of the day and was then followed by a narrow range along the lows heading into the 10:00 ET economic data.

The market didn't take the news well. The selling accelerated as recent data led to fears that the Fed was not yet ready to end its bias for ever-increasing rates. The Institute of Supply Management said that factory activity increased unexpectedly in July to 54.7%. The prices paid index rose to 78.5% for June, its highest level since last October. Construction spending also increased in June, rising 0.3%, more than the that had been 0.1% anticipated.

The market found support at the 10:15 ET reversal period, but the strength of the selling as it came off strong daily resistance made it difficult for a rapid recovery to take place. Instead in the indices fell into a trading range along the lows of the session heading into the early afternoon. When the 13:00 ET reversal period hit the market tried again to break lower, but the base was still not well-developed compared to the prior decline and the initial selling only lasted 30 minutes before the market pulled back up into the range and then made a second go at it.

The market had a more difficult time drawing in the bears for the remainder of the day. The market did put in a nice 5 minute continuation, but as soon as the 15 minute 200 sma hit in the S&P 500, what I expected to be just a scalping opportunity ended up having stronger momentum and the pullback off the 5 minute resistance confirmed a change in pace that led to a reversal into the close. The momentum took the S&Ps back to opening highs, while the Dow and Nasdaq also ran into resistance from earlier in the day and closed a decent amount off the session's lows.

I am still leaning more towards the bears in as the week progresses, but within a larger trading range. My watch list from Monday remains valid since many of the names on it are forming patterns on the weekly and monthly charts and not just the smaller time frames. They include FRP, NUVO, ABMD, ASN, MAT, DDR, LYG, CENX, and SRCL. On the short side our FMD has been doing very well since Monday. It is currently at prior lows as some support. The next support is $42.70ish.

Economic Reports and Events
Aug. 2: Crude Inventories for 7/28 (10:30 am)
Aug. 3: Initial Claims 7/29 (8:30 am), Factory Orders for June (10:00 am), ISM Services for July (10:00 am)
Aug. 4: Average Workweek, Hourly Earnings, Nonfarm Payrolls and Unemployment Rate for July (8:30 am)
Aug. 7: Consumer Credit for June (3:00 pm)
Aug. 8: Productivity-Prel Q2 (8:30 am), FOMC policy statement (2:15 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 stock's earnings date before holding a position overnight.
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
Aug. 3: ABBI, AGU, ATVI, LNT, AEE, AOC, AIV, AMCC, ARTC, BKHM, BWNG, BAM, BRKS, CAH, CECO, CBS, CEPH, CQB, CMS, CTB, CVA, CCI, CVTX, CVS, D, DUK, BOOM, ECLP, EAS, ENN, GTW, GFI, HNT, THX, ICOS, IN, IIP, IRF, IVGN, ISIS, KTC, MFC, MMC, MGM, MOVE, NKTR, NEW, NBL, NUVO, OII, OMX, OIS, PTEN, PDLI, PDC, PXD, PXP, POZN, PPL, PSD, SBAC, SCT, SRE, SKYW, S, SU, TELK, TS, TSO, PMI, PGR, THE, TOPT, TOT, RIG, TYC, UNTD, UVN, VISG, WMG, WMB
Aug. 4: AAUK, GT, KGC, MXIM, MHS, NU, OXY, OMG, POM, TTI, TRI
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.