Good day! Volume was on the moderate side on Wednesday as the indices managed to hold the lower trend line of the uptrend channel on the daily charts that began on July 18. These channel zones are shown in blue on the daily charts. The market is still having a hard time establishing upside momentum and holding onto it, however, so it leaves the door open for stronger selling to hit at any time. Even after an uptrend for the morning, the market formed a trap pattern intraday and sold off into the close again, holding its pattern of strong intraday swings back and forth on the 15-minute charts that we looked at last week.

The morning began with a gap up into the open, resuming the rally that kicked in strongly during the last 45 minutes of the day on Tuesday. The 9:45 ET reversal period held as Tuesday's gap closed in the Dow Jones Ind. Ave. and the S&P 500 came into Monday's channel resistance. The Nasdaq Composite hit resistance as well at Monday's lows, which served as a form of price resistance. All of these factors together served to push the market into a correction into 11:00 ET.

At the 11:00 ET reversal zone the indices were running into 5 minute 20 sma support and the declining volume suggested a lack of strong selling interest. The volume picked up as the range broke higher, confirming the buying and taking the indices into highs. The S&P 500 led the way, while the Nasdaq remained less ambitious. When it ran into morning highs it fell into a range along those highs. The S&Ps and Dow also began to correct, again on declining volume. The Cup with Handle in the Nasdaq and the small flags at highs led to one last rally into noon. This is another strong pivot zone, particularly after a trend morning, and it was followed by a larger correction to the buying heading into the early afternoon.

The market pulled quickly off the highs of 12:00 for about 30 minutes, but then fell into another trading range as it corrected at highs. Compared to the prior rally, this range was not very well developed and lacked a change of pace to favor buying within the range when it attempted to break higher at 14:00 ET. As a result, the attempt failed and the 5 minute 20 sma support quickly gave way, creating a selloff that lasted almost exactly an hour. Just after 15:00 ET the Nasdaq hit its 5 minute 200 sma support and the S&Ps and Dow came into price support from earlier in the session. This held the market up into the close, but the buyers remained on the sidelines.

We began to see some more action Wednesday from our watch list on Monday. CENX finally triggered the pivot on the daily and weekly charts and managed a nice trend day. FMD as a short also saw strong continued follow through in the morning, taking it into an intraday support level by putting in an equal move decline as compared to the prior morning. FRP, ABMD and MAT also began to see some action. The others remain on my radar for upside action on the daily and weekly charts over the next few weeks: NUVO, ASN, DDR, LYG and SRCL.

By the end of the day on Wednesday the Dow managed to hold onto a 74.20 point gain, the S&P 500 closed higher by 7.63 points and the Nasdaq Composite gained 16.82 points. Some of the top gainers were Procter & Gamble (PG), Time Warner, Inc. (TWX), and Cigna Corp. (CI), but they all did so with extreme upside gaps into the open and held a range throughout the session. Those that did manage strong intraday activity as well included Mastercard Inc. (MA), Moodys Corp. (MCO), AL (AL), and MGM Mirage (MGM). Top losers on the day were Avon (AVP), Bovail Corp. (BVF), Rambus (RMBS), J2 Global Comm. (JCOM), and Checkfree Corp. (CKFR). In the afterhours market Starbucks Corp. (SBUX) got crushed, losing 9.2% after failing to meet expectations.

Not much has really changed in terms of the technical aspects of the market all week this week. It remains one that favors swings back and forth on the larger 15-30 minute charts without establishing a stronger trend. On the 30-120 minute charts right now we are looking at a higher possibility for a trading range. As that range progresses it will typically begin to favor one end over the other for a breakout or breakdown. This is what I'll be watching for to see if it can begin to hug the lower end of the trend channel for further downside again or if it's going to take a bit longer for that to develop. Intraday, Tuesday's lows will serve as support.

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
Aug. 7: AMT, ACF, AHS, ANH, AINV, AXS, BBD, EAGL, EP, ENCY, ENTG, FLR, FTO, HMY, MVL, MDR, MYOG, OSIP, PCLN, RTEC, SONS, YSI, URI
Aug. 8: AFR, BMC, CELL, CVC, CMX, CRL, CHRD, CSCO, CCU, CMLS, DNDN, DIGE, DCEL, HLTH, ETR, FMT, GMST, GGP, GIGM, GSS, KOSP, LAMR, LNC, MGAM, NWS, NUAN, RL, PVX, QSFT, RRI, SAPE, SLE, STX, TEVA, DTV, UMC, WPI, WNR
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.