Good morning! The market had a second day in a row of strong selling to end the week. This came after a decisive breakdown following a great deal of choppy, light volume trading over the prior two weeks. Friday began with a pretty flat open, but selling came back in early on and the indices held the 5 minute 20 sma resistance throughout most of the day. The downside was the strongest in the NASDAQ in the morning, moving steadily lower until the 12:00 ET reversal period. The SP500 was much more range bound, while the Dow Jones Ind. Ave. only moved slightly lower.

The market slowed to nearly a halt over noon as the volume dropped significantly. It looked like we might see more of a correction to the morning drop when the indices began to hug the 5 minute 20 sma for a potential Phoenix. When the 13:00 ET reversal period hit, however, the selling began to resume as the Phoenix failed to break higher. Soon the market was back into the lows of the mid-day range and they broke through them around 13:30 ET. The NASDAQ was more extended to the downside at this point, so the Dow and the SP500 were able to take over the reins and saw the most late day action.

Support hit with the 14:00 ET reversal period. At this point I figured we would see a small Bear Flag into the 5 minute 20 sma and then the market would try for a 2B reversal into the close in order to put in a more significant intraday correction. While the 5 minute 20 sma held well and the Bear Flag triggered nicely, the market made more lower of a low than you tend to get for a 2B as the 15:00 ET hit. The NASDAQ even put in an equal move as compared to the 13:30-14:00 ET drop. We still saw the strongest correction intraday on the 5 minute charts in the last hour, but it didn't begin until about 15:15 ET and prior 5 minute highs held, along with the 15 minute 20 sma. This kept the market confined to the lows going into the weekend.

It is pretty typical that moves like this in the market last for about three days. As such, we still have room for one more day of selling to kick off the new week. An average trend move that holds the 15 minute 20 sma resistance will not last more than 2 1/2-3 days before it has to at least correct a bit more intraday and break higher into the 30 or 60 minute 20 sma. So, while the room is certainly there for more selling into Monday, be more cautious on new swingtrade shorts. You can see similar selling action back in mid-April for the most recent comparison to the market's current intraday action.

Updates: AAP from the $51.88 zone on the 4/25 hit new highs of $65.37. Trailing stops hit. CI triggered on 5/26 with the break of $97.55 and has highs of $107.79. Targets hit and trailing stops now initiated. SLXP broke out on 6/15 over $18.13. It hit highs of $18.91, but the rest of the position was stopped out under $17.41 due to afterhours news and an adverse gap into Friday morning. I will keep an eye on HIG for more upside this week, as well as MDRX over the next couple of weeks.

Economic Reports and Events
June 27: -
June 28: Consumer Confidence for Jun (10:00 am)
Jun 29: Chain Deflator-Final for Q1 (8:30 am), GDP-Final for Q1 (8:30 am)
Jun 30: Initial Claims 06/25 (8:30 am), Personal Income for May (8:30 am), Personal Spending for May (8:30 am), Chicago PMI for Jun (10:00 am), Help-Wanted Index for May (10:00 am), FOMC policy announcement (2:15 pm)
July 01: Mich. Sentiment-Rev for Jun (9:45 am), Construction Spending for May (10:00 am), ISM Index for Jun (10:00 am), Auto Sales for Jun (12:00 am), Truck Sales for Jun (12:00 am)
July 04: -
July 05: Factory Orders for May (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 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 27: NKE (B), PAYX (A), WAG (?)
June 28: APOL (B), EMMS (B)
Jun 29: COMS (A), GIS (B), LGF (A), MERX (A), ORCL (B), RIMM (A)
Jun 30: BMET (?), CAG (B), STZ (B), EYET (?), MKC (B), PLMO (B), RHAT (A)
July 01: -
July 04: -
July 05: -

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.