Good morning! The market continued to move higher on Monday as the new week began, but overall the upside pace on the 15 minute charts has remained rather gradual. The trend channel continued to hold as the market moved up along the 15 minute 20 sma zone. For the most part, Monday was very comparable to Friday session except that the day began with a move higher while the same pattern started Thursday afternoon last week. Then selling hit rather quickly, leading to a drop back into the zone of the prior lows on the 5 minute charts. This confirmed the slower pace of the rally because the drop was so much more rapid. It meant that the move into the afternoon, like Friday's upside move over noon, would be much slower than the prior drop on the 5 minute charts.

The correction off support initially was so subtle in the SP500 and Dow Jones Industrial Average, that the indices began to form an Avalanche on the 15 minute charts in the form of a Reverse Head & Shoulders. This never managed to trigger into the 12:00 ET reversal period, however, and the 5 minute 20 sma resistance broke higher out of a smaller Phoenix that the stronger NASDAQ had been forming. Over the next half hour the market was able to make it back to morning highs where the price resistance again held to create another pullback into 13:00 ET. This time though, the pace was not as strong on the selling.

Instead of dropping rapidly to new lows, the NASDAQ held its 5 minute 20 sma support and the market fell into a range along highs. It tested the upper trend channel on this correction coming out of the 14:00 ET reversal period with strong volume, leading to another intraday wave of buying that lasted until about 15:00 ET. The pace slowed into that reversal period, however, creating a pivot as the NASDAQ hit equal move resistance on the 15 minute charts as compared to the 11:00 bounce. The pivot was followed by small reversal pattern on the 1-2 minute charts that allowed the larger pivot to hold highs going into the close when the indices once again came into their 15 minute 20 sma support.

Once again we do not have any larger 15-60 minute reversal patterns forming in the market to trigger an end to the daily rally, but the market is still on the upper end of its typical swing range. It rarely goes this far without a larger correction on the daily charts of at least a trading range. As such, I continue to be more cautious on longs, particularly as new swingtrade positions, and will remain more focused on intraday activity.

AAP from the $51.88 zone on the 25th is correcting a bit on the daily after two strong weeks. Highs of $59.85. Trailing stop initiated for position trades. May 18th earnings. ASKJ on the weekly charts has also broken higher. From last week, BBI is no longer of interest. VAR and ALGN from 5/11 have tight trailing stops initiated. VAR triggered a breakout just under $34, it has highs of $38.00. ADTN highs are $22.70 from the $21 zone. LCAV triggered a continuation on Friday over $41.50, higher than the prior day due to the gap. It hit highs of $43.32. Friday lows are now support.

Economic Reports and Events
May 24: FOMC Minutes (2:00 pm)
May 25: Durable Orders for Apr (8:30 am), New Home Sales for Apr (10:00 am)
May 26: Chain Deflator-Prel. for Q1 (8:30 am), GDP-Prel for Q1 (8:30 am), Initial Claims 05/21 (8:30 am), Help-Wanted Index for Apr (10:00 am)
May 27: Personal Income for Apr (8:30 am), Personal Spending for Apr (8:30 am), Mich. Sentiment-Rev. for May (9:45 am)
May 30: -
May 31: Chicago PMI for May (10:00 am), Consumer Confidence for May (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 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 24: CSC (A), GME (B), NTAP (A), SEAC (A), VOD (?), WSM (?)
May 25: AZO (B), DLTR (B), KMG (?), MIK (A), ¸NOVL (?), PETC (?), WIND (A)
May 26: CHS (A), CA (?), COST (B), CMOS (12:00 pm ET), DG (B), FRED (B), HNZ (07:00 am ET), PDCO (B), TECD (?), TIVO (A), TOL (?)
May 27: -
May 30: -
May 31: FRO (?), HOV (A), SMTC (A)

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.