Good morning! Things remained slow on Thursday as volume continued to be on the light side. I have been putting a lot more focus on swingtrades over the last two weeks than daytrades simply because the indices have not been forming a lot of clear cut patterns intraday. We are still getting some nice setups in individual stocks, particularly in the morning, but the indices overall have been very choppy and have been whipping back and forth from highs to lows and back nearly every day. This has made trading the EMinis a bit more challenging lately and has cut down the number of such trades I've been taking by a great deal over the past month, making it the slowest I can remember in recent years.

If you take a look at the 5 minute charts below, what you will notice is the large degree of overlap from bar to bar as the market has made it's way throughout the day. You can also see that there really weren't any setups on the 5 minute charts that stood out well. The day began with a downside gap into support from the prior afternoon and the 5 minute 200 sma. The market bounced off this level to quickly fill the gap going into the 10:00 ET Factory Orders data when the market pulled back for about 15 minutes. The support hit once more and the market basically fell into a very narrow range with a slight upside tilt as the morning progressed.

The slight tilt on the base throughout the morning as volume held on the light side suggested that we might see a 30 minute Avalanche going into the early afternoon. After pivoting at 12:30 ET, however, we never saw any pick up on selling pace going into the lower trend channel and the 15 minute 20 sma support in the SP500 and NASDAQ continued to hold as the 14:00 ET reversal period hit. Light volume even on this small correction also remained more bullish. The pace out of this support zone began to pick up a bit and without the Avalanche pattern triggering by that time, it looked probable that we would see the market move back into the prior day's highs. Even with that target in mind though, finding places to buy with anything better than a 1:1 risk to reward ratio was pretty much impossible if you wanted to keep your stop under support levels. You just had to jump in and hold on if you wanted it. The 5 minute 20 sma managed to serve as support into the close.

I have no change in bias since yesterday regarding the overall market. I have a number of swingtrade longs open, so am hoping we continue to hold up but am trading much more defensively and mainly focusing on managing my open positions rather than pursuing a great deal of new ones on the shorter time frames. This is particularly true when it comes to EMini daytrades. WLP, IGT, OVTI, and EL are stocks I am watching for new swings long.

AAP from the $51.88 zone on the 4/25 is correcting a bit on the daily after two strong weeks. Highs of $61.50. Trailing stop initiated for position trades. ASKJ on the weekly charts has also broken higher into $31.38 from 5/18. LCAV triggered a continuation on Friday over $41.50, higher than the prior day due to the gap. It hit highs of $45.49. Some trailing stops hit. CI triggered on 5/26 with the break of $97.55 and hit highs of $99.10. It held the 20 day sma on Wednesday and trailing stops can be under those lows. UNH, RT and GR triggered on Wednesday. UNH support is now Thursday's low. On the short side, WEN formed a 2T on the daily charts on Tuesday and broke lower, closing near those lows on Wednesday at the 15 minute 20 sma support. Thursday high is now resistance that needs to hold.

Economic Reports and Events
Jun 03: Average Workweek for May (8:30 am), Hourly Earnings for May (8:30 am), Nonfarm Payrolls for May (8:30 am), Unemployment Rate for May (8:30 am), ISM Services for May (10:00 am)
Jun 06: -
Jun 07: Consumer Credit for Apr (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 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
Jun 03: SFD (?)
Jun 06: CMGI (A), ZQK (?)
Jun 07: ABS (?), COO (A), TOY (?)

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.