From a technical standpoint the action intraday was fairly smooth in the indices with some decent setups on 5 and 15 minute charts, but I found fewer opportunities in individual stocks on Monday than last week because many of the momentum players had choppier intraday action or lacked strong continuation patterns. Many of the strongest winners saw most of their gains in the morning and to take advantage of them you had to take more of a "close your eyes and jump" attitude. This is one of the reasons that I like trading both EMinis and stocks, since I can switch back and forth according to where the most clear-cut activity is concentrated on a certain day. I have a core set of variables I look for and when I don't have the correct combination it leads me to be less active. 

In the futures market the indices still had a lot of the key variables in terms of pace and volume activity that I like to see. Looking at the 5 minute charts, notice a number of core buy and sell patterns through the day, whereas last week individual stocks did a better job of providing more individual opportunities. The activity out of the open on Monday was the most erratic of the day since it moved quickly higher for the first 15-20 minutes before continuing the downside trend from Friday afternoon. This lasted only another 15 minutes before stalling. The pace momentum in the market then turned over fairly quickly at that point and the lows held throughout the remainder of the session.

The strongest upside of the day in the overall market took place from 10-11:30 ET. The Nasdaq led the rally. It stalled only as it hit resistance at the 5 minute 200 simple moving average. The S&P 500 and Dow also found strong intraday resistance at this same time. Both indices hit their 15 minute 20 smas as well as price resistance from the highs of Friday's closing range intraday. The upside momentum was enough to hold off any strong selling mid-day. After two small waves of correction on the 5 minute charts the market triggered a 15 minute buy setup when the congestion along the 15 minute 20 sma broke higher. The light volume during this correction helped attract the buyers back into the early part of the afternoon.

Even on the continuation pattern, however, the market still saw a throw-back to the upside activity from last week. The buying was more gradual with a lot more overlap from bar to bar. The Nasdaq did not experience this to the same degree as the S&P 500 and Dow, but it still didn't quite have all the get-up-and-go of the morning rally. This time the S&Ps and Dow  made it to their own 5 minute 200 sma resistance, while the Nasdaq hit Friday morning lows as price resistance. These levels stalled the afternoon upside and allowed for another correction on the 15 minute charts. This one was more extreme than the mid-day pullback, but the patterns were very similar: a retracement to support (in this case the 5 minute 20 sma), a base along that support, and then a continuation breakdown. This brought the indices back into mid-day trading levels which held into the close.

I haven't been able to spend as much time lately putting sole focus on the market all day, so the strategies I've employed have put more emphasis on shorter, more rapid daytrades where I'm holding about 30-60 minutes on average. There is a theory that folks who want to trade part time should devote themselves to the study of swingtrading, where they hold for a couple of days at a time. In practice, I've found this to actually be much more time consuming, since I then have to devote time to scanning after-hours, checking back repeatedly to adjust orders. I also run a significantly increased risk of stops that I've placed on the books being flushed out at levels I would never have gotten out had I been watching the action into it, such as when a morning gaps.

So, for me the solution that has worked well is to focus on very high probability setups on the intraday charts or else on setups where I plan on holding at least a couple of weeks to a couple months. In those cases I do not usually keep stops on the books unless I am going to be out of town for a few days, because I have more time to work with an order when I need to. In the last two weeks or so though, I have not found as many of these. While requiring less intraday focus than daytrading, they do have a greater after-hours commitment in terms of research, but it doesn't need to be as often as swingtrading and core watch lists can be developed and used for months at a time when patterns are still not mature.

I am sure some folks out there will disagree with me regarding this point of view, especially due to all the hype out there trying to sell part-time traders into swingtrading, but it's something that is factoring into my own trading at present and felt it would be a good thing for newer traders to take into consideration when developing a strategy around their own time constraints.

That being said, I also think this happens to be a great strategy right now for the overall market. Many of the larger time frames on the weekly and monthly charts of the majority of uptrending stocks are fairly extended and are due to correct. It's true that many have yet to begin to do so, however, so I am still not being very aggressive on the short side. Nevertheless, it is something that has held me back from adding a lot of new position trades on at this time. Luckily this earnings season has shown a lot more intraday follow-through on stocks that have gapped one way or the other on the news than was the case last season, so this is providing plenty of intraday opportunities with fewer exceptions than before.

Due to the highly range-bound type of correction taking place in the market since mid-month, I am not going to go into Tuesday with a strong bias and will instead just wait to see what the top momentum stocks are heading into the session to use to develop an intraday bias. I do think that we will continue to see it remain easier for the bears to gain control for stronger moves on 15 minute charts due to recent activity intraday and the monthly charts, but it can only take a couple of hours for the bias within a range such as this to change and propel the market higher for one more "hurrah".

Economic Reports and Events
Oct. 31: Employment Cost Index Q3 (8:30 am), Chicago PMI for Oct. (10:00 pm), Consumer Confidence for Oct. (10:00 am)
Nov. 1: Auto and Truck Sales for Oct. (12:00 am), Construction Spending for Sep. (10:00 am, ISM Index for Oct. (10:00 am), Crude Inventories 10/27 (10:30 am)
Nov. 2: Initial Claims 10/28 (8:30 am), Productivity-Prel. for Q3 (8:30 am), Factory Orders for Sep. (10:00 am)
Nov. 3: Nonfarm Payrolls, Unemployment Rate, Hourly Earnings, and Average Workweek for Oct. (8:30 am), ISM Services for Oct. (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.
Oct. 31: AGR, AL, ACAS, AEP, ADM, ADP, ITU, BIIB, BJS, CCJ, CE, CHTR, CMI, CVTX, DPL, EXP, EK, ETR, EOG, EOP, EQR, IT, HMY, HLX, HLT, IACI, JLL, KSU, LTR, MRO, MLM, MAS, MCK, OII, OCR, ORCT, OSK, PRGO, PNC, PPL, PG, KWK, Q, RDC, RCL, SAFC, SNY, SMI, SGY, JOE, UAUA, UBS, UPL, UARN, URI, X, UTHR, VLO, VSH, VC, VNO
Nov. 1: TFSM, AG, ALXN, AGN, AW, DOX, AOC, WTR, AIZ, ACLS, BIDU, BMRN, CAI, ELY, CAM, CNQ, CBEY, CRDN, CI, CINF, CLX, CNO, DVA, DNR, XRAY, DVN, DIOD, D, BOOM, EDS, ESS, FIC, GRMN, GPRO, GSF, GES, HOC, IDCC, ITRI, KND, KYPH, LVS, MMC, MA, MXIM, MWV, MIL, MYL, NFP, NHP, NLS, NEM, NBL, OGE, OKE, OSUR, PMTC, PKD, PTEN, PGH, PXD, PLXS, PRU, PEG, PWEI, QDEL, H, COL, SWKS, SMSI, STXN, SUN, STKL, SHO, SUPG,  TSRA, SVM, TWX, TRN, UHCO, UNM, VCLK, WRNC, WCG, WYN
Nov. 2: ACOR, AAP, AGU, APCC, ABC, AIV, AQNT, ILA, AVNX, ABX, BDX, BBI, BWNG, CA, CMX, CBS, CNP, CTL, CEPH, CPHD, CEM, CQB, CBB, CMS, COGT, CTSH, CSC, ED, CS, CROX, CVS, ERTS, HLTH, ENCY, ENR, ENTG, ENZN, FBR, GWT, GMST, GLBL, HS, HTCH, HYC, ICOS, INCY, ICE, IFF, IP, IRF, ICGE, MDR, MGM, NKTR, NSTC, NBIX, NSR, NEW, NXL, NI, OSG, PAAS, PDLI, PRFT, PQ, PDC, PWAV, PSA, QCOM, PWR, ROIAK, GOLD, RYI, TSG, SGMS, SRE, SINA, SIX, SFC, STN, SFY, BRLC, TLM, TSYS, TSO, PMI, THE, RIG, UN, UVN, USU, VRX, VPHM, WLT, WEBM, WDC, WLK, WFMI, WMBS
Nov. 3: AEE, DUK, EGO, HPOL, HNT, HRP, KSE, MHS, NRG, OMG, PGN, SRP, TTI, THQI, WR
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.