Good day! Following last week's lack-luster performance, the market picked up the pace on Monday. The indices did open slightly lower, but found support right away at 5 minute 200 simple moving averages and prior 15 minute lows. They quickly filled the morning gap and moved into Friday's afternoon highs. A very brief rest at that resistance was followed by new intraday highs and another strong upside momentum move. The Dow led the way and broke through Friday's highs without any difficulty. The market stalled its move when the 10:45 ET reversal period hit at the same time as a 5 minute equal move on the continuation as compared to the opening rally and as the Nasdaq retested the price resistance zone of Friday's highs.

The market corrected to the upside for the remainder of the morning. The Dow continued to show the most relative strength on intraday pullbacks or corrections, while the Nasdaq remained the weakest of the three indices. Buying hit again as the Dow and S&P 500 ran into their 5 minute 20 sma support. The Nasdaq pulled back a bit more, but also came into support at the same time from earlier highs. Another strong upside move followed before the market corrected again into the afternoon.

A third rally on the 15 minute charts took the market higher into the 14:00 ET reversal period. This time around the prior highs had a more difficult time breaking. The Nasdaq ran into its mid-day highs as price resistance and held it, but the S&Ps and the Dow again made new highs on the day. On this rally, however, all three indices also came into resistance on the daily charts at the highs of the range from last week.

Due to the strong resistance on the daily charts and three waves of weakening upside intraday, the market was able to hold the highs for the last two hours of the day on Monday. Even though the extent of the last rally was less than the morning ones, the pace within the upside move remained stronger than average. This led to a slower corrective action for the remainder of the afternoon, so although the market pulled back from highs, the pullback was choppy and took a lot longer to retrace the prior rally.

By the end of the day the Dow Jones Ind. Ave. tacked on 67.96 points and closed at 11,352.01. The S&P 500 gained 6.60 points to end the session at 1,301.78. The Nasdaq Composite had rose 20.41 points and finished the day at 2,160.70. Volume remained light as anticipated.

Many of the stronger stocks on the day were those that had pulled back into 10 or 20 day sma support and then gapped or rallied off that support level. Other leaders popped off monthly lows a few weeks ago, based along resistance, and then broke higher on daily Phoenix patterns. Some examples are RACK, IVGN, LCC, CNW, NVDA and MMM. The strongest sectors included networkers and internet stocks. The oil services and energy stocks, that had looked so favorable heading into the weekend with Ernesto on the horizon, found themselves under pressure as the path of the hurricane continued to shift to the east and weakened into Monday. Gold stocks also saw a lot of weakness on the day.

Volume is going to remain a concern this week as we head into a three-day weekend. It is also going to be easier to see continued chop back and forth on the 15 minute charts and less follow through from one day into the next.

Economic Reports and Events
Aug. 29: Consumer Confidence for Aug. (10:00 am), FOMC Minutes Aug. 8 (2:00 pm)
Aug. 30: Chain Deflator-Prel. Q2 and GDP-Prel. Q2 (8:30 am), Crude Inventories 8/25 (10:30 am)
Aug. 31: Initial Claims 8/26 (8:30 am), Personal Income and Personal Spending for July (8:30 am), Aug. Chicago PMI (10:00 am), July Factory Orders (10:00 am), July Help-Wanted Index (10:00 am)
Sept. 1: Aug. Auto and Truck Sales (12:00 am); Aug. Ave. Workweek, Hourly Earnings, Nonfarm Payrolls and Unemployment Rate (8:30 am), Aug. Michigan Sentiment-Rev. (9:50 am), July Construction Spending (10:00 am), Aug. ISM Index (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. 29: ADCT, COCO, NOVL, SAFM, SMTC, SIGM, LNUX
Aug. 30: JDSU, LTXX, NCS, TIVO
Aug. 31: CHT, CIEN, DG, DLM, HRB, HNZ, JOYG, KWD, OVTI, SYX, TIF, PAY, ZLC
Sept. 1: VIP
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.