Good day! This week got off to a very slow start, beginning with a trading range on the 15 minute charts that lasted throughout the day. This range continued into Tuesday morning, opening near the highs of the trend channel and then chopping around until the 2:15 Fed announcement. Despite a weaker open, the Nasdaq saw the most relative strength into the afternoon. It attempted a late morning break higher shortly after 11:00 ET, but lacked the volume and freedom from resistance to follow through on the move.

At noon the market found itself at some support and the pace of the selling began to increase as compared to upside moves within the range. This can best be seen on the 5 minute Nasdaq chart.  A second low level base took place heading into 13:30 ET and led to a selloff into the Fed. Volume remained light, however, since many intraday traders were sitting on the sidelines by this time to avoid the reactionary whiplash that typically follows the Fed policy announcement.

As anticipated, the Fed. ended its steady stream of quarter-point rate hikes for the first time in two years. The decision was not unanimous, however, with one FOMC member voted for another increase. The initial response was one of relief and the market ran back into the morning highs. Support and resistance levels hold well even following strong news, and the market reversed quickly once the knowledge had sunk in. Given the expected nature of the decision, it became of the clichés of "buy the rumor, sell the news." Within a matter of minutes the market was back to the session's lows and then beyond, breaking the daily uptrend channel of recent weeks.

The market remained weak into the close, but held the zone of the lows made by the first drop on the 5 minute charts following the Fed. A second large wave of selling took place heading into the 15:30 ET reversal period. This time the pace was a lot more gradual and it helped create another pivot low that held for the last thirty minutes of the session. The losses came to 45.79 points on the Dow Jones Ind. Ave., 4.29 points on the S&P 500, and 11.65 points on the Nasdaq Composite.

I am more bearish overall into Wednesday, but the indices are above a lot of support on the daily charts that can continue to create stronger swings on the 15 minute time frame. We will have to monitor the momentum intraday for a stronger bias. It the market holds the lows in the morning, that will be more favorable to a breakdown. At the moment I have a fairly evenly distributed list of buy versus short patterns on individual stocks that I am monitoring for trade potential. A few on the long side are CHAP, SRCL, MET and DRQ. On the short side I have added NX, GGP, and NYX to my watch list.

Economic Reports and Events
Aug. 9: Wholesale Inventories for June (10:00 am), Crude Inventories 8/4 (10:30 am)
Aug. 10: Initial Claims 8/5 (8:30 am), Trade Balance for June (8:30 am), Treasury Budget for July (2:00 pm)
Aug. 11: Export Prices ex-ag, Import Prices ex-oil, Retail Sales, Retail Sales ex-auto for July (8:30 am), Business Inventories for June (10:00 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.
Aug. 9: LEND, ACS, AIG, SIL, RMK, AVT, CSE, CPST, CD, DYN, FWLT, GE, HSP, HGSI, IO, KG, LBTYA, MIR, HAWK, PGN, THC, IPG, UTSI, DIS, WCI
Aug. 10: AAP, AIRN, ADI, BVF, BGG, EAT, CREE, DISH, ELX, EXPE, FMD, GG, ING, JCP, KSS, MOVI, NXG, NVDA, PSUN, TGT, TOMO, UBB, URBN
Aug. 11: CCUR, ERJ, IAG, PBR
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.