Good morning! It was a rough day for the market on Tuesday as it took the time to digest Monday's strong selling and the latest economic data to hit the wires. The initial action was a continuation of the downside into the early morning. Some of the additional pressure came from the reported fall of durable goods orders by 8.3% in October, which was the largest drop in more than 6 years and much more than had been anticipated. This took the Nasdaq Composite into its 20 day simple moving average support and the S&P 500 and Dow more strongly into a test of the congestion from several weeks ago before turning around.

The Dow had the most difficult time changing course. The 9:45 ET reversal period held, but the Dow took another stab at lows after the 10:00 home sales data came out showing the largest drop on record, falling 3.5% from the prior year (and more than that in this area of the woods!). This led to a decline into the 10:15 ET reversal period before all three indices were able to pull up strongly enough to shake off the bears. A glimmer of hope came from the first gain in existing home sales in eight months (unless you live in southwest Florida hehe).

The early morning selling experienced a sharp reversal coming out of 10:15 ET and that buying took the indices strongly into the 15 minute 20 simple moving averages in the Nasdaq Composite and Dow Jones Ind. Ave., but pushed past it in the S&P 500 where strength in oil and energy stocks helped provide an added boost to the momentum. My favorite sector in recent months, telecom, also saw significant gains on the day, climbing 1.7% as compared to oil's 1.4% gain.

The market slowed down considerably after the first hour of trading. The indices chopped slightly lower along the 15 minute 20 sma, changing its bias on several occasions with attempts at stronger upside until finally achieving that coming out of the 14:00 ET reversal period. At that point the market pulled up to its 5 minute 20 sma, based there on light volume, and then broke higher. That action was followed by a second slower pullback into 15:00 ET where the 5 minute 20 sma became support before taking the market back to the morning's highs. It was not enough momentum, however, to actually bust through those highs and it leaves the market rather uncertain heading into Wednesday.

The end result of Tuesday's session was the choppier, back and forth type of day we were looking to expect, but I wish the range hadn't had as much overlap from bar to bar intraday as it did! The market ended the day with very little change as compared to the prior session's close. The Dow ($DJI) gained 14.74 points (+0.1%), the S&P 500 ($SPX) gained 4.82 points (0.3%), and the Nasdaq ($COMPX) rose 6.69 points (0.3%). There is enough support here on the daily charts to continue to see more choppy action on Wednesday, although I do expect it to not be quite as whippy as Tuesday's session. HAIN and DIGE are two stocks I am watching for upside. They both do have the con of already having had three waves of buying on the daily time frames. For the most part though, my focus still remains intraday at this time.

Economic Reports and Events This Week
Monday: -
Tuesday: Durable Orders for Oct. (8:30 am), Consumer Confidence for Nov. (10:00 am), Existing Home Sales for Oct. (10:00 am)
Wednesday: GDP-Prel. and Chain Deflator-Prel. for Q3 (8:30 am), New Home Sales for Oct. (10:00 am), Crude Inventories 11/24 (10:30 am), Fed's Beige Book (2:00 pm)
Thursday: Initial Claims 11/25 (8:30 am), Personal Income and Spending for Oct. (8:30 am), Chicago PMI for Nov. (10:00 am), Help-Wanted Index for Oct. (10:00 am)
Friday: Auto Sales and Truck Sales for Nov. (12:00 am), Construction Spending for Oct. (10:00 am), ISM Index for Nov. (10:00 am)

Key Earnings Announcements This Week
Monday: DCI
Tuesday: AMWD, JTX, RTLX, SKIL, ARO, DBRN, RSTO, SIGM, and LNUX
Wednesday: DSW, OPSW, TIF, CHS, SNPS, and TIVO
Thursday: DLM, HNZ, MOV, MGAM, SFD, FNSR, HRB, ISLE, MCDTA, OVTI, and UNCA
Friday: KWD, and WMG
Note: All economic numbers and earnings reports are in lines with those compiled by Yahoo Finance and Briefing.com. 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.