Good day! Trading remained on the lighter side on Tuesday following Monday's uptrend. The market sold off throughout the morning after moving higher into the 5 and 15 minute 20 simple moving averages. These hit at the same time as the release of the consumer confidence index. The index experienced its largest decline in a year, falling to 99.6 in August from July's revised number of 107.0. This was stronger than anticipated and the market sharply reversed and sold off into 10:30 ET.

Initial support hit in the indices at prior 15 minute lows in the Nasdaq Composite and the 15 minute 200 sma in the S&P 500. Strong volume on the decline indicated exhaustion on the move and the market formed a brief bear flag into its 5 minute 20 sma resistance. This base was underdeveloped as compared to the decline and hence the follow through was not nearly as impressive, creating only a scalp move to slightly lower lows intraday. The pace of the decline was still stronger than average, however, and it took some time for the market to begin to recover.

Volume was exceptionally light over noon. The FOMC Minutes came out at 14:00 ET and the market held a very narrow range going into that release. The market flushed lower, retesting Nasdaq lows intraday and making new lows in the S&P 500 and Dow, before rapidly reversing. Trading remained choppy, but picked up after forming a bull flag from 14:30 ET to 15:15 ET. As soon as the 5 minute 20 sma support hit, the market burst through afternoon highs. All three of the major indices were soon back at Monday's highs. The market was extended intraday by the time those highs hit, so they served as solid resistance and the market just chopped around again for the last 20-30 minutes of the day.

The afternoon reversal allowed the indices to close with small gains on the day. The Dow Jones Ind. Ave. rose 17.93 points to 11,369.94. The S&P 500 added 2.50 points to close at 1,204.28. The Nasdaq Composite climbed 11.60 points and ended the session at 2,172.30. We can continue to expect more activity than last week over the next two days, but again see intraday action slow on Friday. Nevertheless, the week as a whole is likely to continue to remain lighter than average and it's important to be a bit more picky than usual to avoid overtrading in this environment.

Economic Reports and Events
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)
Sept. 4: Market closed for Labor Day holiday
Sept. 5: -
Sept. 6: Productivity-Rev. for Q2 (8:30 am), ISM Services for Aug. (10:00 am), Crude Inventories 9/1 (10:30 am), Fed's Beige Book (2:00 pm)
Sept. 7: Initial Claims 9/2 (8:20 am), Wholesale Inventories for July (10:00 am)
Sept. 8: Consumer Credit for July (3:00 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. 30: JDSU, LTXX, NCS, TIVO
Aug. 31: CHT, CIEN, DG, DLM, HRB, HNZ, JOYG, KWD, OVTI, SYX, TIF, PAY, ZLC
Sept. 1: VIP
Sept. 4: -
Sept. 5: MBT
Sept. 6: AZPN, HOV, MATK
Sept. 7: FCEL, JOSB, NSM, SHFL, COO, UTIW
Sept. 8: -
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.