Good day! After a dour finale to last week's trading, the market managed a strong recovery on Monday. The Dow Jones Industrial Average climbed 119.51 points, while the S&P 500 rose 15.48 points and the Nasdaq Composite gained 35.16 points. Positive remarks from the Fed and a slew of news events, including a number of buyouts and mergers, helped instigate the upside. It began right away with a gap higher that took the Nasdaq into Friday's highs within minutes of the open. This opening  resistance stalled the market for about 15 minutes or so, but when the base at intraday highs gave way, the market surged.

This early morning rally was the strongest action on the day. A number of stocks closed near lows on Friday and then gapped higher on Monday, providing for some strong momentum plays throughout the session. The early morning rally did a lot to exhaust the buyers, however, and the pace throughout the remainder of the day was a lot more demure. The Nasdaq experienced the most difficult time continuing the rally. The Dow and S&Ps favored better, forming continuation breakout patterns out of 11:00/11:30 ET. The Nasdaq did not participate at all, instead it held the days highs and continued within its range at those levels into the early afternoon.

While the Nasdaq was testing support at the lows of the trading range at 12:30 ET, the Dow and S&Ps were finding support at a slightly higher level with the 5 minute 20 simple moving average. The volume on the correction into that level was the lightest of the day up until that point, indicating that the bears were holding off for the time being. This created another continuation pattern on the upside. The 5 minute 20 sma then resumed as trend channel support throughout the remainder of the session, although the Nasdaq was never able to adequately clear the day's highs.

Even Monday's rally was well within the parameters of a larger correction in the market. It failed to confirm attempts at new market highs, Volume, however, remained average... showing that there  was still a lot of concern regarding new buy patterns.  We never saw that upside flush in the market that we were looking for last week, so we might still see that happen, but the market is very news-driven from one day to the next at this point and can easily whip back in the other direction with little notice.

Economic Reports and Events
Nov. 7: Consumer Credit for Sept. (3:00 pm)
Nov. 8: Crude Inventories 11/03 (10:30 am)
Nov. 9: Export Prices ex-ag. and Import Prices ex-oil for Oct. (8:30 am), Initial Claims 11/04 (8:30 am), Trade Balance for Sep. (8:30 am), Wholesale Inventories for Sep. (10:00 am)
Nov. 10: -

Key Earnings Announcements
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.
Nov. 7:  APC, BZH, DISH, FTO, HW, HOLX, KOPN, NOOF, OPTN, PLMD, REDF, TEVA, OATS, BBBB, CECO, CRAY, JCOM, SAPE, TWTC, TRLG, WYNN and UBET
Nov. 8:  ARTX, BRL, CVC, DEPO, DTV, FD, HGSI, DISK, SIRI, TRMA, BORL, CELL, CSCO, ERES, CELL, JUPM, IPAR, SLNK, OVEN, and ZIPR
Nov. 9:  BIVN, CNTY, FLO, GIGM, HANS, IMAX, MRGE, TXU, URBN, JOBS, COGO, ECLG, DIET, EXPE, KSS, SNDA, and DIS
Nov. 10: SIL, ERF, HEW, IAG, PBR, CXW
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.