Good morning! Thursday was a much slower session than the day before, starting out with the lightest volume of the week due to the Fed. announcement anticipated later in the day. The morning began with a bit of a gap up into the open, bringing the NASDAQ directly into resistance from the prior day. Within 15 minutes, selling had hit and the market began to close the morning gap. Once again the NASDAQ remained the weakest, pulling quickly into the 5 minute 20 sma. The SP500, NASDAQ Comp. and Dow Jones Ind. Ave. all based along intraday lows into the 10:45 ET reversal period. At that point the support gave way and the market sold off into the prior day's lows.

When the support level hit going into lunch, the market simply fell flat. With no strong retracement in price and volume dropping off into noon, the market was favoring more downside into the early afternoon on a Bear Flag. Due to the 2:15 ET Fed. announcement, however, the risk on such a setup was a lot higher. The SP500 managed to break, but the NASDAQ held lows into 13:30 ET. While the pace on the downside still remained stronger, making it still look like it wanted to move lower, we instead saw a bit of a pop ahead of the Fed.

The reaction to the 2:15 ET announcement started slowly, but soon gave way to strong selling following the quarter-point rate hike and expectations of more to come. While the increase was anticipated, many were hoping for better sentiments regarding the future. The initial selling continued on a tiny 1-2 minute Bear Flag going into 14:30 ET before bouncing. The gap level from the 28th is what helped stall this move. The correction off support took the market back to the 5 minute 20 sma resistance which held perfectly and led to a strong pivot back to lows and slightly beyond by the end of the day. I was expecting the prior support to hold a bit better since the bounce was on the strong side, but the NASDAQ managed to make it back into the price support zone from Monday's lows. The SP500 also fell into support that had held on Monday at its 100 day sma.

Going into Friday I am expecting a bit of a correction off the prior lows on the 60 minute charts. I would like to see this level hold for another week in order to form a nice base for a breakdown. This would create a number of nice swingtrade short patterns. If the support breaks before that then I would continue to focus on daytrades until the support from the 200 day sma in the SP500 hits, as well as price support from early May.

Updates: HIG and MDRX both hit adjusted/trailing stops. No new swingtrades at this time.

Economic Reports and Events
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
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.