Good morning! Daily volume in the market remains lighter as it continues to trade primarily in a range. It has made for some rather dull trading in the indices overall even though morning breakouts followed through much more decently than in recent days. A larger number of the market gainers heading into the day managed to break higher on continuation patterns, creating some decent intraday setup. The indices themselves were still more sloppy, however, opening at highs from Tuesday and leading to a small range for the first 30-45 minutes of the day before it was able to break higher with the 10:15 ET reversal period.

The market ranged for the next 15-30 minutes until the Dow Jones Ind. Ave. closed the gap from two days ago. This served as price resistance, along with the prior daily highs in the NASDAQ, and the market began to pull back near 10:00 ET. This pullback, while strong, was not exceptional. The support on the 5 minute 20 sma on the all sessions futures charts held the pullback, but buyers were wary and the market fell into a narrow range along the support. This created an Avalanche pattern, albeit a higher risk once since the pace was not any stronger than the last wave of buying. The Avalanche triggered shortly after 11:30 ET, but was unable to pick up speed and ended up pulling back up into the range until early afternoon when it finally broke lower into the 15 minute 20 sma support shortly after 13:00 ET.

The selling in the early afternoon lacked confirmation. Volume never picked up on more than a 1 minute chart so the support held pretty well. Due to the rapid downside pace, however, the correction off the support was slower, pulling up gradually back into the highs of the range once more where it was able to put in a pivot high going into 14:30 ET. Once again though, the volume was lacking on the drop and the prior lows held and formed another pivot just before 15:00 ET. This took the market back up to highs, which succeeded in breaking in the SP500 and Dow. The NASDAQ morning highs, as the weaker index, stalled all three and held into the close.

After so many days of range bound trading, the market, particularly the Dow, is actually looking higher, but the NASDAQ has me pretty concerned since it's at some very strong daily and weekly resistance. Since it's Friday and we have a lot of economic data coming out today, I don't think it's likely that I'll enter new swingtrades. Instead I will primarily focus on early morning breakouts on news stocks and just look to manage open positions into the afternoon.

AAP from the $51.88 zone on the 25th is correcting a bit on the daily after two strong weeks. Highs of $59.88. Trailing stop initiated for position trades. May 18th earnings. ASKJ on the weekly charts has also broken higher into $30.57 from 5/18. VAR from 5/11 has a tight trailing stops initiated. VAR triggered a breakout just under $34, it has highs of $38.22. LCAV triggered a continuation on Friday over $41.50, higher than the prior day due to the gap. It hit highs of $45.35. Some trailing stops hit. CI trigger on 5/26 with the break of $97.55 and hit highs of $98.96. It is looking well going into Friday.

Economic Reports and Events
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 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.