Good day! Tuesday began with a bit of a slow start, selling off sharply for the first few minutes of the day, but then slowly turning over into 10:00 ET. The back and forth pace in the indices were fairly consistent, allowing the indices to come back into the opening highs, but then pushing them back near lows into 11:00 ET. It wasn't long until the market managed to break the morning highs. There was very little reaction to the resistance on this third test of highs. The third is the one most likely to break, but usually the market will stall slightly just before or after it breaks when it comes off the lows of the range. That didn't really happen this time around. Instead the market continued to climb steadily until the 12:00 ET reversal period hit. Only then did the indices begin a larger correction on the 5 and 15 minute charts.

The stronger than average upside led to a more gradual correction off highs into the early afternoon in many stocks. The Dow fell the sharpest, while the Nasdaq held up the most, aided by the tech stocks. The reversal periods continued to hold well. Three waves of selling into price and moving average support took the indices into the 14:00 ET reversal zone. This is a very typical time of the day for reversals and breakouts to occur. It took a few minutes, but the pace soon increased, taking the indices back into the zone of the mid-day highs.

The final hour and a half of the day was extremely choppy. Risk was much higher than average again and, even though the indices still managed to close near intraday highs, they were not able to accomplish much within the range. Even though the volume did pick up a bit on the day, the strongest move remained the one that took place going into noon.

By the end of the session, the Dow Jones Ind. Ave. ($DJI) gained 5.13 points. The S&P 500 (SPX) rose 2.24 points. The strongest of the three indices, the Nasdaq Composite ($COMPX) tacked on 12.54 points. Advanced out paced decliners on an average of 18 to 12. In top news, an oil field located in the Gulf attracted a lot of attention. Crude oil prices fell in response to the suggestion that the U.S. would need to rely less on foreign oil. Caterpiller Inc. (CAT), a heavy equipment maker, climbed on news of upcoming price increases. Inco Ltd. (N) terminated its merger agreement with Phelps Dodge Corp. (PD). Viacom (VIA, VIA.B) also experienced significant movement, falling into the open after CEO and President Tom Freston stepped out of these roles.

The market is looking a bit stronger heading into the week. I am more bullish into Wednesday, looking for the Nasdaq to now try the 200 day sma this week. There aren't much for new swingtrade setups at this time since most went last week when the overall market broke higher, so I'll continue to take things a bit slower for now on the daily time frame. Instead I am going to look primarily for intraday setups that simply have daily charts supporting further momentum in the same direction.

Economic Reports and Events
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.
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.