Good day! Heading into the new week, the market was giving a lot of room to the bears. The SP500 and Dow were both forming short patterns on the 15 minute charts. The day began as this range at lows going into Friday's close continued. Intraday we saw some initial selling within the larger range for the first 15 minute of the day. Then as the 9:45 ET reversal period hit, the market fell into a smaller range at lows on the 2-5 minute charts within the larger one on the 15 minute charts. This was a strong bearish signal and it triggered going into the 10:45 ET reversal period.

The selling was strong out of this pattern, but it was short-lived. When the 200 and 20 day simple moving averages hit in the Dow Jones Ind. Ave. at the same time as the 11:00 ET reversal period, the support held. A volume spike on the 2 minute charts also indicated an exhaustion move, which helped confirm the support. Since the downside pace was very rapid, however, the initial correction off these lows was much more gradual. It started to pick up into the 12:00 ET reversal period as the SP500 and Dow formed a 5 minute Phoenix in the form of a Cup with Handle along the 5 minute 20 sma resistance. This pattern followed through very well into the congestion zone from the morning base, as well as the 15 minute 20 sma resistance, which slowed the move into the early afternoon.

As the resistance held, the market pulled back very gradually, basing along the 15 minute 20 sma. Volume dropped off at the same time, creating another Phoenix on this larger time frame. This triggered right out of the 13:30 ET reversal period. It led to a strong move back into morning highs and the 15 minute 200 sma in the SP500 ET. This was also equal move resistance on the 5 and 15 minute charts as compared to the move off 11:00 ET lows. This was followed by a stronger correction back into the 15 minute 20 sma, which held going into the close.

On the daily charts I don't see a strong bias aside from the range the Dow has been trading in for the last couple of weeks. Intraday the pace has been strongest on the downside recently, which is typically more bearish, but we have yet to see some stronger bearish setups, particularly on the daily charts. Most of the bearish action has been on much smaller intraday setups. I still have a lot of longs on as swingtrades and most are holding up pretty well. Since I am also not finding much on the daily charts for shorts, my swingtrade bias remains on the upside even though intraday selling has been creating more risk.

The late day upside in the market on Monday was good on open swingtrades. AAP from the $51.88 zone on the 4/25 is correcting a bit on the daily after two strong weeks. Highs of $62.24. Trailing stop initiated for position trades. ASKJ has highs of $31.75 from the 5/18 breakout. Tight trailing stop initiated. LCAV triggered a continuation on 5/20 over $41.50, higher than the prior day due to the gap. It hit highs of $48.16. This also should have tight trailing stops. CI triggered on 5/26 with the break of $97.55 and has highs of $100.57. It held the 20 day sma and trailing stops can be under those lows of $97.30. UNH, RT and GR triggered on Wednesday. UNH from the $49.40 zone has highs of $51.33 with some trailing stops hit. RT and GR have yet to pick up strength but are still outperforming the market. WLP and OVTI triggered on Friday and look nice going into the new week. IGT and EL are still of interest.

Economic Reports and Events
Jun 07: Consumer Credit for Apr (3:00 pm)
Jun 08: Wholesale Inventories for Apr (10:00 am)
Jun 09: Initial Claims 06/04 (8:30 am)
Jun 10: Export Prices ex-ag. For may (8:30 am), Import Prices ex-oil for May (8:30 am), Trade Balance for Apr (8:30 am), Treasury Budget for May (2:00 pm)
Jun 13: -
Jun 14: Core PPI for May (8:30 am), PPI for May (8:30 am), Retail Sales for May (8:30 am), Retail Sales ex-auto for May (8:30 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 date 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 07: ABS (?), COO (A), TOY (?)
Jun 08: CMTL (B), HRB (4:00 pm ET)
Jun 09: FNSR (A), NSM (?), NAV (B), TOY (?)
Jun 10: -
Jun 13: -
Jun 14: BBY (?), BMC (?), PIR (?)

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.