Good day! The market kicked off the week on a very strong note, cumulating in a closing high in the S&P 500 that had not been achieved since the early part of 2001. The change in pace that began on Friday afternoon with the pivot off the 14:30 ET lows with a stronger upside move followed by a more gradual pullback, continued with a strong upside gap into Monday's open. The buying had been steady in the afterhours market heading into the day until running into 5 minute 200 simple moving average resistance on the intraday time frames. The Nasdaq Composite and S&P 500 also hit 15 minute 200 sma resistance at the same time, while the Dow hit price resistance from Friday's highs.

The indices did manage a rather radical reversal off these strong resistance levels intraday, selling off at a pace that was comparable to the prior upside, but this only meant that an extension of the trading range was necessary intraday before the range could finally break out. The pullback found support at prior lows from Friday, as well as the 10:45 ET reversal period. This is a common time of the day for a morning move to turn over. The buying was again similar in terms of pace or momentum as the prior two moves on the 15 minute charts, although the Nasdaq was able to regain more of its lost ground than the S&P and Dow before the next pullback began.

After this third move of similar momentum, the pace on the correction off highs into noon was more gradual than the ones that immediately preceded it. This change in pace once more favored the bulls since the volume on the pullback declined, showing a lack of fear on the part of the bulls, even though the market was correcting. The move that would soon lead the way to new intraday highs began with the strong 12:00 ET reversal period. It followed through very well over the course of the next hour, stalling initially at the 13:00 ET reversal period to allow for a bull flag to form.

Once again the reversal period held well. A decline in volume into the one at 14:00 ET created another strong setup for a move higher. It began timidly, but persisted into the final hour of the day. The pace was a bit slower this time around, so when the reversal zones of 15:00 and 15:30 ET hit, the market was able to pull back a bit more strongly into the close. The final correction of the day came off the highs that had been made last week, and although the indices combined did not manage to solidly break those levels intraday, the S&P 500 still managed that milestone close at more than 5 1/2-year highs.

Even though the pace on the larger intraday time frames was able to turn back over again as we start this new week, I remain more cautious on new position trades for buy setups longer term since October is still a major reversal zone for the markets. The Nasdaq Composite does have some room it can still move before hitting resistance from earlier in the year, but the slower upside pace in the indices as compared to the prior decline on the weekly charts will still make significantly higher highs in the S&Ps and Dow more difficult. In the QQQQ the resistance zone is $42. I am focusing primarily on the larger intraday time frames for daytrades off 5-15 minute charts and for potential overnight holds based on 60-120 minute setups at this time.

Economic Reports and Events
Sept. 26: Consumer Confidence for Sep. (10:00 am)
Sept. 27: Durable Orders for Aug. (8:30 am), New Home Sales for Aug. (10:00 am), Crude Inventories 9/22 (10:30 am)
Sept. 28: Chain Deflator-Final. Q2 and GDP-Final. Q2 (8:30 am), Initial Claims 9/23 (8:30 am), Aug. Help-Wanted Index (10:00 am)
Sept. 29: Personal Income and Personal Spending for Aug. (8:30 am), Sept. Michigan Sentiment-Rev. (9:50 am), Sept. Chicago PMI (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.
Sept. 26: DBRN, FUL, JBL, LEN, PAYX, RHAT, WOR
Sept. 27: MKC
Sept. 28: ACN, FDO, RIMM, TXI, TIBX
Sept. 29: GPN
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.