Good morning! After selling off sharply following the FOMC announcement on Wednesday, the market began to recoup some of the losses ahead of the close. The pace and percentage of the recovery made it easier to hold those lows and try to push the indices into a larger trading range as I mentioned yesterday. This scenario held throughout Thursday's session, but the Nasdaq Composite has outperformed both the S&P 500 and (surprise, surprise) even outpaced the high-flying Dow Jones Industrial Average as tech stocks rallied.

The premarket jobs data had little impact on the market heading into the session on Thursday. Initial claims for jobless benefits rose last week by 10,000 to 329,000, the highest level since Nov. 25. The 10:00 ET data caused a bit more of a reaction. The Institute of Supply Management showed a decline in the nonmanufacturing index from 58.9% to 57.1% in December, albeit well within expectations.

Even though the housing sector continues to weigh it down a bit, the data shows that the rest of the economy has been holding up pretty well. Even housing has shown some reprieve though, with pending home sales falling 0.5% in November.. although that has yet to be reflected in my neighborhood! The Commerce Dept. went on to report in a separate release that factory orders for November increased 0.9% after falling 4.5% the previous month.

Although the S&P 500 and Dow both sold off sharply around 10:00 ET following the mid-morning economic releases, the Nasdaq still held up rather well. All three indices hit new intraday lows, but the Nasdaq held its 5 minute 20 simple moving average while the Dow and S&P fell back into Wednesday's lows before finding adequate support. The market then slowly regained momentum as the morning progressed.

By the time the 11:00 ET reversal period hit, the Dow and S&P were back at the highs from Wednesday's close and the Nasdaq had made it all the way back up into the mid-day congestion on Wednesday. These resistance zones hitting at the same time as the reversal zone allowed the market to fall into a trading range heading into noon on Thursday.

The momentum bias within the range was bearish well into the early afternoon as the volume declined along the resistance. Nevertheless, the larger 15 minute charts remained bullish as the indices continued to hold up, suggesting the Nasdaq would retest the prior day's highs, but it took a change of pace at the end of the mid-day range to allow for a decent breakout. This took place from about 13:45 to 14:30 ET when the indices hugged their 5 minute 20 sma and the Nasdaq began to close in on its 15 minute 20 sma support.

An initial attempt that took the Nasdaq back into the day's highs was soon followed by a more solid break of those highs going into the 15:00 ET reversal period. The resistance from the prior day's highs in the Nasdaq and moving average resistance levels intraday, however, kept the market within the realm of that larger 30-60 minute range we were expecting going into the day.

I have been much more leery over the last couple of months to add too much to long term buy setups. That remains even more true now. This does not mean, however, that I am actively shorting. I'm simply dropping down to focus on smaller time frames, primarily intraday, with a few swings. I expect this to remain the case for the next couple of weeks.

Economic Reports and Events This Week
Monday: -
Tuesday: -
Wednesday: Construction Spending for Nov. and ISM Index for Dec. (10:00 am), FOMC Minutes 12/12 (2:00 pm), Auto Sales and Truck Sales for Dec. (5:00 pm)
Thursday: Initial Claims 12/30 (8:30 am), Factory Orders for Nov. and ISM Services for Dec. (10:00 am)
Friday: Average Workweek, Hourly Earnings, Nonfarm Payrolls, and Unemployment Rate for Dec. (8:30 am)

Key Earnings Announcements This Week
Monday: -
Tuesday: -
Wednesday: BLUD, SONC
Thursday: STZ, MON, MSM
Friday: GPN
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.