Good morning! The market saw some pretty nice technical moves in Wednesday's session. Both the Dow Jones Ind. Ave. and the SP500 gapped up slightly although the NASDAQ was pretty flat. With strong moving average resistance overhead, the open held and the market began to sell off right away. This selling continued until the 10:15 ET reversal period hit. The weaker NASDAQ led the way and fell the hardest, only stalling as it hit the 5 minute 200 sma support, while the SP500 and Dow both held the higher 15 minute 20 sma support levels.

The strong downside pace in the indices out of the open helped hold the market in for the remainder of the day. Initially it began with a trading range. The upside pace off the support was very comparable to the prior drop. This is favorable for a triangle or sideways trading range. In this case it took the form of a triangle and the range narrowed as volume dropped off into noon. This was nearly a textbook triangle formation as the upside pace began to decline as the trend channel narrowed. In the Dow you can see a tiny Avalanche formation along the 5 minute 20 sma coming off the 12:00 ET pivot highs. This led to a break in the triangle in that index. The NASDAQ and SP500 followed suit into the 13:00 ET reversal period.

The afternoon selling remained strong going into the 14:00 ET reversal period. At that point the NASDAQ hit prior lows and the Dow and SP500 both came into price support from the prior trading day. The upside off the support was strong, but still not as much as the selling had been. As a result, the resistance from the prior range held, but the market was unable to really break the support level from the prior lows and the market fell into another range into the close. Support and resistance levels held extremely well throughout the entire day, making for a nice day for daytrading based on technical indicators.

As you can see by looking at the daily charts, the correction from Monday's lows has been more gradual than the drop into them. This is right in line with my expectations because of how rapid that drop had been. The market continues to have a lot of resistance overhead with daily moving averages, as well as price resistance. The mid-range level from the prior daily base will be particularly strong resistance and likely to hold in the NASDAQ if it can make it back there. We are already hitting that level in the SP500, although it still remains higher in the Dow. I would continue to focus primarily on daytrades at this time.

Updates: HIG from Monday over the $76.50 zone and hit 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 $17.72. Trailing stop initiated.

Economic Reports and Events
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 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.