Good morning! After falling from Wednesday's highs, the indices continued the new intraday downtrend on Thursday. Initially though, the market remained in the trading range which began the prior afternoon. Despite a downward adjustment in the U.S.'s economic growth on Thursday ahead of the open, the market reacted very little initially. While the economy was estimated to have grown at 2.6% annualized rate last month, that rate was revised to a 2% rate for the third quarter. The anticipated rate was 2.2%.

As the market continued to consolidate throughout the morning, the upside trading within that congestion remained slower than the downside moves and the upside also occurred on light volume. This made it very easy for the market to break quickly lower into the early afternoon. This move was accelerated with the assistance of the Philadelphia Fed, which stated at noon that its manufacturing sentiment index had fallen below zero for the third time in the past four months. The reading of -4.3 was the lowest since the spring of 2003, signifying a contraction in the factory sector. As in the prior day's selloff, however, this descent on the five to fifteen minute charts was the only strong move to take place intraday, although overall it was stronger than in the prior session.

Unlike on Wednesday, the volume increased more strongly with Thursday's late day descent. The highest volume of the day in the Nasdaq Composite took place just after 12:30 ET, indicating an exhaustion move underway. The extreme pace of the selloff forestalled a rapid reversal into the latter half of the day, but the exhaustion move found significant support at the 50 day simple moving average in the Nasdaq, 10 day sma in the Dow, and 20 day sma in the S&P 500, as well as price support from Tuesday's lows.

The market initially attempted a correction off that support with the 13:00 ET reversal period, but the pace refused to turn over just yet and the 5 minute 20 sma intraday held, leading to a slightly lower low into the 14:00 ET reversal period. This allowed for a greater turnover in momentum as the indices slide down their 5 minute 20 period simple moving averages at a slower pace than within the prior selling. It allowed the indices to eventually break through that resistance and continue into the 15 minute 20 sma, although the trading remained choppy for the remainder of the day. Even with the late day retracement, however, the Dow Jones Ind. Ave. ($DJI) still lost 42.62 points (-0.3%), while the S&P 500 ($SPX), shed 5.23 points (-0.4%), and the Nasdaq Composite ($COMPX) fell 11.76 points (-0.5%).

Friday should be a rather slow day for the market since we are now heading into a three-day holiday weekend. Often on the Friday ahead of a Monday off will have most of the intraday action in the first 90 minutes of the day, although even then the volume is less than average. After that time, however, its difficult to get much action at all. Volume overall is likely to continue to remain below average throughout the remainder of the year.

Note: Today's column will be my last until the New Year since I will be heading back up north for the holidays. I hope you have/continue to have, a wonderful holiday season!

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.