Good day! The market had a pretty good day on Thursday. We started to see some better follow through on daytrade setups and the market indices themselves had a number of decent patterns intraday. This action falls in line with my expectation of a larger correction off support and a more bullish bias heading into the weekend. Even after the huge upside rally Wednesday afternoon, the market failed to revert to its recent norm and give it all back the next day. Instead, Thursday was a pretty narrow range day at the highs of the prior day.

The NASDAQ Comp. and SP500 continued their late day rally on Wednesday as they headed into the next morning. This rally continued for the first 15 minutes or so of the day until the prior day's highs in the NASDAQ helped to stall the move into the 9:45 am ET reversal period. The Dow Jones Ind. Ave. diverged from the rest of the market and fell into the open. It managed to make it back up to the prior day's close by the 10:15 ET reversal period. At that time all three indices formed 2-5 minute buy setups. The SP500 formed a small 2 minute Bull Flag. The NASDAQ formed a strong triangle at highs. Then the Dow formed a 5 minute Cup with Handle. All three triggered shortly after 10:30 ET and led to new highs on the day.

Despite the new highs, the resistance that hit coming out of this morning move was stronger. When the NASDAQ hit its triangle target by establishing an equal move on the 5 minute breakout as compared to the rally out of the open, it also hit its 30 minute 200 sma. After such a strong intraday rally coming off the prior mid-day lows, the market was exhausted. The upside came to a halt and began to pull back. This started with a 2 minute Avalanche into 11:00 ET and then as the 5 minute 20 sma support hit the indices formed a 5 minute Avalanche by basing along that support until it triggered a breakdown into noon.

I began to watch for a 5 minute Bear Flag after the Avalanche followed through in order to put in a third downside move off highs on the 5 minute charts. The market managed to bounce too quickly of the lows to create a strong setup though. It popped back to the 5 minute 20 sma resistance and attempted to form a Phoenix, but failed to pick up speed and fell into a triangle on the 5 minute charts instead. The 13:30 ET pivot high held and the NASDAQ fell to opening lows.

The pace turned over a bit into the last hour and a half of the day. The market had a tougher time breaking lower into early afternoon and this helped it to bounce into the close. The pace on that bounce, while stronger, was still not severe and prior highs held very well as the market just crawled back up for the remainder of the day. It is looking like this will create a longer range on the 60 minute charts going into Friday morning. At present, the bias is still for a bullish resolution to this action on the 60 minute charts.

Updates: AAP from the $51.88 zone on the 4/25 hit new highs of $63.50. Trailing stop initiated for position trades. Some hit. CI triggered on 5/26 with the break of $97.55 and has highs of $106.55. Targets hit and trailing stops now initiated. RT from the $15.40-.50 zone has highs of $16.65.  GR from the $42 zone hit highs of $42.98. Support is now Thursday's lows. EL needs to hold Wed. lows.  USG from a break in $47.50 has highs of $48.05 and need to hold $46.40. SPLS is still of interest.  SLXP broke out on 6/15 over $18.13. It has highs of $18.30.

Economic Reports and Events
June 17: 8:30 am - Current account; 9:45 am - Consumer sentiment
Jun 20: Leading Indicators for May (10:00 am)
Jun 21: -

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
June 17: CC (B)
Jun 20: KMX (B)
Jun 21: CMC (B), DRI (?), JBL (A), LEN (B), KR (?)

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.