Good morning! The market followed through very nicely on my expectations of an upside move on Tuesday. As I mentioned in Monday's commentary, after three days of selling in the market where it holds the 15 minute 20 sma resistance, it will typically break that resistance on the 4th day. It did so this time with a gap up into the open. The gap held and soon the market was moving higher for the first hour of the day until finally coming into resistance when the NASDAQ hit its 5 minute 200 sma as well as the prior day's highs.

After such a strong upside move from Monday's lows, the market was very extended coming out of the early morning rally. This threw the indices into a trading range intraday as the morning continued. The daily charts assured that the market would hold up and a triangle developed over noon, breaking higher right out of the strong 13:00 ET reversal period. This move out of the third test of intraday highs stalled at the ES's (SP500 EMini's) 30 minute 200 sma on the all sessions charts. It was also equal move resistance on the 5 minute charts as compared to the upside move out of 11:00 ET. The resistance was followed by a bull flag on the 5 minute charts when the market pulled back gradually on declining volume into the 5 minute 20 sma and the 14:30 ET reversal period.

The market ended on a strong note when the trend channel intraday held and it put in another 5 minute equal move coming out of the 14:30 ET reversal period. Notice that even on that bull flag, the third test of highs was the one that gave way. The base for the flag was also very comparable to the prior 5 minute base going into 13:00 ET. These helped to create a solid flag. If it had continued to base for just another 5-10 minutes to break the 5 minute 20 sma, it would have been a much higher risk setup. Unfortunately, I had to leave a bit early on Tuesday and the pattern didn't trigger in time for me to be able to take it. The follow through was very nice though, putting in another 5 minute equal move before the end of the day.

I am expecting to see the zone of Monday's lows hold as the week progresses. I have not been finding much for swingtrades at this time, although a few are still popping up, like MDRX yesterday. I'm not seeing much for position trades either (3+ week holds). For the most part I'll still be focusing on the intraday action for setups. The daily charts have a lot of moving average resistance to deal with, so each one can easily stall the intraday moves, much like the NASDAQ 200 day sma and the Dow's 50 day sma held Tuesday.

Updates: HIG from Monday broke nicely over the $76.50 zone and has highs of $77.52. Support is the 20 day sma. MDRX gave a buy setup on 6/28 at $16.50. It hit highs of $17.25 so a stop can be adjusted under Tuesday's lows.

Economic Reports and Events
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 29: COMS (A), GIS (B), LGF (A), MERX (A), ORCL (B), RIMM (A)
June 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.